Report On Milk Sector Welcomed In EU Parliament

15 March 2011
SNP MEP Alyn Smith has commended his colleague in the European Parliament's Agriculture Committee, Jim Nicholson, for his work so far on his report on contractual relations in the milk and milk products sector.
Smith will, however, bring forward amendments seeking to make milk contracts compulsory for all milk production, in all EU countries, with no opt outs for co-operatives.
Nicholson's draft report was discussed in the meeting of the Agriculture Committee this afternoon. The Nicholson Report calls for all farmers, even in Member States without compulsory contracts, to have the right to demand a contract from their collector or processor. It also proposes that farmers will be able to sell their milk to more than one collector on multiple contracts, and the wording on contracts is reformed to improve flexibility, and the ability of farmers to renegotiate.
Smith said:
"We've known for some time that the milk market simply isn't working, and while this report does not provide a silver bullet it is a solid enough start. As a lawyer to trade, the legal practices in the market just horrify me. We can hardly expect decent economic outcomes throughout the supply chain if we start off production with a crazy contractual basis.
"I'm glad that the European Commission and the High Level Group have brought forward these proposals to provide for written contracts, and to allow milk producers to come together to improve their bargaining power to get a better price. I think my colleague from Northern Ireland has, on the whole, improved these proposals: farmer organisations have informed me of the flaws regarding the fact that farmers cannot ask for a contract, and the uncertainty surrounding multiple contracts. I'm glad that Jim's amendments have cleared this up.
"Having said that, I think that we need to take a closer look at the precise percentages of the market which individual producer organisations are allowed to cover. We need to strike a careful balance between improving the bargaining power of farmers without going too far and creating monopolies. This will, of course, be hotly contested, but whatever we decide can hardly be worse than where we are now.
"I think that the proposals can be strengthened further. Milk producers have called for a level playing field: contracts should be made compulsory across the EU. And if contracts are worth doing, they're worth doing for everyone, I see little to be gained in the proposal to exempt co-operatives from the requirement. If everyone is acting in a transparent and fair manner then contracts are nothing to be feared, and can only give a greater transparency to the operation of a very flawed market."