LTO Nederland wants fat correction now

5 January 2009

The Dutch farmers’ union LTO Nederland wants to ensure that Dutch dairy farmers don’t face another super-levy of several million euros this year. One option would be to bring forward the proposed reduction in fat correction to the current milk quotum year. Exceeding the production ceiling would not then immediately incur a fine.

The idea was tabled by chairman Siem Jan Schenk of the LTO Dairy Farmers’ union branch in The Hague at a press conference held by the Dairy Commodity Board.  ‘The European Commission can put forward a proposal of this kind, but the Internal Market Committee would need to approve it. If such a proposal were to be feasible, it needs to be applied quickly,’ Schenk added.

The super-levy for the Netherlands came to a total of EUR 39.9 million in the milk price year 2007/2008. In the previous year it was still only EUR 8.8 million.
According to Schenk, a higher milk quotum will not lead to a substantial rise in milk production, as feared by opponents of the LTO approach. He added that this was because the remainder of the milk price year was too short. Estimates show that current milk production in the 25 EU Member States barely rise. Between 1 April and 30 September 2008, i.e. the first half of the current quotum year, milk production in the EU rose by only 0.2 per cent. This is striking since the EU quota system does provide enough scope to increase milk production: during this milk quotum year, milk production in the EU will remain five billion kilos below the permitted volume. Milk production is continuing to decline, especially in the United Kingdom, Sweden, Finland, Bulgaria and Romania. 

Together with Denmark and Ireland, the Netherlands has for some time been calling for an extra expansion of the quotum (of 2-3 per cent per year). In recent years, New Zealand and the US have come to dominate global markets which were previously served by European dairy suppliers.