[E-rundbrief] Info 858 - Milk and global crisis

[Matthias Reichl]

E-Rundbrief - Info 858 - Via Campesina International: Milk: Via
Campesina proposes ways out of the global crisis. Press release

Bad Ischl, 1.9.2009

Begegnungszentrum für aktive Gewaltlosigkeit

www.begegnungszentrum.at

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PRESS RELEASE

Milk : Via Campesina proposes ways out of the global crisis


(Jakarta/Brussels, 1 September 2009) Around the world the price of milk
at the farm gate has dropped dramatically (1), threatening to put
millions of producers out of business. As a result, milk producers have
been protesting in many parts of the world. Since the beginning of the
year, thousand from Via Campesina member organisations have joined
protests in Brussels and Strasburg (EU), Madrid, Berlin, Galicia,
France, Belgium, Germany, Portugal, Switzerland, Indonesia, Dominican
Republic, and all across the United States.

Although a very small part of the milk produced worldwide is traded at
the international level, the “liberalisation” of this market has lead to
the dependency of all milk producers upon world prices. The WTO pits
dairy farmers around the world against each other in a race to the
bottom as global food processors like Nestlé, Fonterra, Kraft... benefit
from access to the cheapest milk. The price is mainly influenced by the
low costs of production in some exporting countries such as New Zealand
and Australia, and the dumping of US and EU surpluses on the world
market. However, instead of reducing their production, the EU and the US
have recently reactivated their export subsidies pushing the price even
lower.

Everywhere in the world, the current price is far too low for producers
to make a living. This does not benefit consumers either because the
price of dairy products in supermarkets have remained high since the
food price crisis in 2007/08. The milk industry and big retailers are
making huge profits at the costs of farmers and consumers.

The European Union has decided to liberalise further the milk market by
putting an end in 2015 to its supply management system (quotas), and by
increasing quotas by one percent per year until 2015. This policy has
led milk producers, women and men, to an unprecedented state of crisis
and could end up in a social and environmental disaster.

In the United States, free traders and dairy processors continue to
demand further deregulation of milk markets and emphasize the need to be
“globally competitive” and export oriented. Milk pricing is largely
determined by the price of cheese at the Chicago Mercantile Exchange,
which is easily prone to manipulation by a few corporate entities. In
December 2008, Dairy Farmers of America, the nation’s largest dairy
cooperative, was fined $12 million for price manipulation at the CME.
DFA was also under investigation for two years by the U.S. government
for antitrust abuses in monopolizing markets and forcing dairy farmers
to become part of their cooperative. In many parts of the country, dairy
farmers have few alternatives other than DFA to sell their milk to.

Thanks to a trade loophole from the WTO, U.S. dairy farmers have also
been hurt by the dumping of cheap foreign milk protein concentrates,
mainly from New Zealand, that has displaced U.S. farmers milk while
cheapening the quality of dairy products for consumers.

The WTO agreement of 1994 and the IMF conditions for credit pushed
governments to deregulate their milk market. Except for a few countries
such as Canada, milk supply management mechanisms have disappeared.

Milk is a fresh, nutritious product which gives economic value to
millions hectares of grasslands in the world, promoting rural
development and employment as long as it is produced by many sustainable
family farms. However, as a result of trade liberalisation, industrial
milk production has massively replaced small dairy farms. This has had
devastating consequences: industrial production depends on expensive
inputs (feedstuffs, energy...), it contaminates the environment (manure,
methane, transport of imported feedstuffs...), and leads to social
disasters (dairy family farms disappear, workers face often bad working
conditions in industrial farms…).

In January 2009, the Indonesian Peasant's Union (SPI) demanded the
government to protect local dairy farmers from complete bankruptcy. The
transnational company Nestle, one of the main buyer of milk in the
country, had started lowering the price at the farm gate even though
dairy products were sold at an exceptionally high price to the
consumers. All milk processing companies followed the move. This seemed
to be the last straw for the domestic dairy sector that had been hit by
25 years of deregulation. In 1983, under IMF regulation, the government
dismantled the legislation forcing companies operating in Indonesia to
buy a certain percentage of milk to local breeders besides imported milk
used as their main ingredients. In 2003, the Indonesian government went
further by reducing tariffs on imported milk from 5% to 0%. As a result,
70% of the milk consumed in Indonesia is imported from Australia and New
Zealand and farmers are wondering if they will be able to maintain their
activity.

To urgently solve the crisis, Via Campesina asks governments to act:

     * To maintain and develop in all dairy regions a sustainable farmers
based milk production, which is based on local fodder;

     * To (re)introduce public supply management policies to keep the
production in balance with the demand, so that producers and consumers
can get fair prices;

     * Farm gate dairy prices have to cover the costs of production,
including the remuneration of work;

     * To stop the WTO obligation to import at least 5% of milk products

     * To ban any export subsidy and to allow all countries or unions to
introduce tariffs to protect their own milk production.

     * To maintain high standards of identity for dairy products to
insure the integrity of the definition of milk and prevent the dumping
of inferior milk substitute products.


(1) In Europe the milk price dropped with 30% since the end of 2007,
going below the very low prices of 2006


Contacts:
Europe (ECVC): Lidia Senra: (ES-PT-FR): +34609845861,   René Louail (FR)
+ 33672848792
              Gérard Choplin (FR-EN-DE) + 3222173112 – gerard;
choplin at eurovia.org  www.eurovia.org
USA:     Katherine Ozer, National Family Farm Coalition, kozer at nffc.net,
   +1 202-543-5675
Indonesia: (SPI) Achmad Ya'kub (EN), tel: +62 817712347 SPI- Elisha
Kartini (EN), tel: +62  81314761305
La Via Campesina: Tejo Pramono (EN), tel: +6281586699975
viacampesina at viacampesina.org


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Matthias Reichl, Pressesprecher/ press speaker,
Begegnungszentrum fuer aktive Gewaltlosigkeit
Center for Encounter and active Non-Violence
Wolfgangerstr. 26, A-4820 Bad Ischl, Austria,
fon: +43 6132 24590, Informationen/ informations,
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