Milk producers take strike action against low prices
In recent months, Belgian milk producers have organised several strike initiatives in protest against the very low price of milk. Farmer federations are denouncing the EU deregulation policies, as well as the low prices imposed by retailers which have obliged producers to sell their products at a loss. An agreement reached by Flemish farmer representatives seeks to help producers in the short term; however, the agreement has been rejected by Walloon farmer organisations.
Throughout the month of June 2009 and in recent months, milk producers in Belgium have organised several strike actions. The initiative included the blockading of supermarket depots, which in some cases prevented customers from accessing shops. In addition, roads and motorways were blocked in order to prevent lorries from delivering their goods. The strike action is attributed to the very low price of milk, which is being sold at a price that is two times lower than production costs, therefore forcing farmers to sell at a loss. This situation is deemed unacceptable and unbearable by the farmers, who insist that the deregulation policy of the European Union and the big supermarket chains are putting severe pressure on prices.
Impact of liberalisation and supermarket discounts
The European Commission decided to progressively increase the quotas for milk production volumes, with the aim of eliminating the quotas by 2015. This decision has sought to liberalise agricultural production, allowing farmers to produce as much milk as they are able to. However, according to farmers, this possibility for overproduction will lead to a substantial decline in milk prices, aggravated by the reduction in demand due to the economic crisis. At the same time, farmers are denouncing the practices of large retail trade companies and in particular those of ‘hard discount’ retailers, which are lowering as much as possible their product prices. A litre of milk, for instance, is currently being sold at €0.19 in hard discount retailers while, according to the producers, the production costs for the same volume amount to about €0.30.
Controversial agreement between farmers and distributors
At the beginning of July 2009, the Flemish farmer representatives – the Federation of Flemish Farmers (Boerenbond) and the General Farmers’ Trade Union (Algemeen Boerensyndicaat, ABS) – reached an agreement with the Belgian Federation of Distributive Undertakings (Fédération belge des entreprises de distribution/Belgische federatie van de distributieondernemingen, FEDIS). The agreement stipulates that distributors should pay €0.14 per litre of milk sold in addition to the milk price to a solidarity fund. This fund is managed by the Belgian Intervention and Restitution Office (Bureau d’intervention et de restitution belge/Belgisch Interventie- en Restitutiebureau, BIRB), which was created in the framework of the Common Agricultural Policy (CAP). BIRB is in charge of the reimbursement of money to farmers who receive just €0.02 per litre of milk produced, taking into account not only the milk sold directly to clients but also exports and milk sold to transformative industries. The agreement seeks to help producers in the short term. The federations also want to help producers in the longer term and have agreed to establish a working group to help build a new system that could be included in a further inter-professional agreement.
Although some of the farmers’ demands have been met through this agreement, the Walloon farmer organisations have refused to accept the agreement. According to the Walloon Federation of Agriculture (Fédération Wallonne de l’agriculture, FWA) and the Unionised Federation of Groups of Breeders and Farmers (Fédération unie de groupements d’éleveurs et d’agriculteurs, FUGEA), the €0.02 amount does not allow milk producers to cover the totality of production costs. They are requesting that transformed products such as cheese and yoghurts be included in this amount and that it should be increased to €0.03. The federations argue that distributive undertakings buy milk for twice as cheap as the production costs and that the efforts they agreed will in the end be borne by consumers. The two federations encouraged farmers to continue with their actions.
Milk strike initiative at European level
The milk production issue also has a European dimension, affecting milk producers in several Member States. In France, for example, in order to ease the milk crisis, the three branches of the milk industry – producers, cooperatives and private sector processors – concluded a multi-industry agreement that sets out the average milk prices for 2009 (FR0909019I).
At this point, however, European governments have been unable to reach consensus. While some are clearly in favour of liberalising the milk market, others seem to have a preference for regulation in order to stabilise milk prices. Due to the lack of consensus at European level, the European Milk Board (EMB) encouraged its members to organise a ‘milk strike’, which would involve throwing out the milk produced or giving it directly to consumers. In Belgium, members have engaged in such action, spreading several million litres of milk across fields.
Emmanuelle Perin, Institute for Labour Studies (IST), Catholic University of Louvain (UCL)