Monday, May 30, 2016

Debate Milk Price: Less would be more –

Debate milk price

If the price of milk is expected to increase again, there is only one solution: the state must force the farmers to deliver less milk.

a cow runs on a ramp in the background  bicycles

thousands dairy farmers are victims of neoliberal ideology in these months. You have to give their cows, many do lose the whole yard. Because they get for years less money for milk, as they have to pay as labor, food and energy.

the milk price for producers in the national average is around 24 recently cents per kilogram slipped – the cost of production according to industry estimates, at 43 cents. Never has stopped as long as such a serious crisis. But last year gave Federal Statistical Office to 4.2 percent of dairy farmers. It’s high time that the government intervenes and the quantity of production regulated.

Why you should care? Because dairy farmers are very important for life in the rural areas because they provide jobs and contracts for other industries. If most of the approximately 73,000 German milk producers disappear, more villages are still orphaned.

It does not contribute to a healthy distribution of wealth in that a few mega farms displace tens of thousands of small and medium enterprises. The giants can produce long term thanks to size effects on Billigstniveau. And it is also about the environment and the welfare of the animals. Who only makes losses, which it is hard to do for biodiversity or to keep cows appropriate to the species.

debt is the agricultural lobby

The main causes of price declines are not suggesting that, the Federal agriculture Minister Christian Schmidt (CSU). Russian President Vladimir Putin has indeed imposed a ban on imports of many EU dairy products in Ukraine conflict, and the Chinese import less than expected; but the price decline began long before the entry into force of the Russian embargo in August 2014. According to China decreased, according to the Federal Statistical Office, for example, in 2012, before the price crisis, only 1.5 percent of German dairy product exports.

much more on prices suppressed but that farmers are allowed to milk as much since April 2015 again as they want. Previously, the EU had for 31 years limited the milk quota amount. But as Brussels – driven, for example, by the federal government and, ironically, the German Farmers’ Association – the ratio over the years more and more softened and then lifted, farmers produced more. since April 1 alone, 2015, the production increased by 6.1 million tonnes or 3.8 percent. Similarly, it was in the previous year. 6 million tons are about 10 percent of internationally traded amount.

Europe is therefore largely responsible for that milk is so cheap on the world market. No other major production region has so greatly increased their production in absolute terms.

A basic quota abolition was that economists had forecast, the demand for milk is in particular in Asia, thanks to population growth and new eating habits increase. These export opportunities should benefit from EU farmers, without being hindered by the quota. But on the growth markets also pushed other, for example, the New Zealanders. Moreover, as China

supplied more even. Herumdoktern to the symptoms

Instead of reducing the amount of agricultural ministers Schmidt now wants just a bit from the symptoms of the milk price crisis herumdoktern. In his “milk summit” with representatives of the farmers’ union, the dairies and the trade on Monday in Berlin he will probably announce the following: more loans for distressed enterprises, a few tax breaks, a subsidy for social security. We are talking about support amounting to about 100 million euros.

This will hardly compensate for the losses of the dairy farmers. You run into the billions. Such measures increase possibly still suffering dahinsiechender establishments. But there is still too much milk on the market, prices will stay low and go bankrupt farms medium term after all.

Nor will bring it, the food trade to his “responsibility” to remember how agriculture ministers Schmidt did on the eve of milk summit. Because the supermarket chains simply do what they need to do. If a chain would not negotiate the best possible price for them, they would be subject to some point of their competitors. Only when the supply is scarce, are Aldi and the other significantly re-pay more for milk.

This market principle also applies to the dairies. Although farmers can partly because of oppressive contracts hardly move among different purchasers, but that’s not the primary reason that the dairies paid paltry prices. But just the oversupply.

The EU should set limits

This root of the problem has to tear the state, because the market participants due to their competition with them unable are. The EU should require dairy farmers as long to produce less, until the price has recovered. The peasants could give their cows, for example, less concentrate and more hay. Through such measures, the production amount could quickly by 2 to 3 percent reduction, expects the Federal Association of German dairy farmers before.

This decline would be sufficient to reduce the price pressure strong. So an engagement would not be the old rate because the new quantity limit would be limited in time. The fear that then export non-EU countries more to Europe, because of the high import tariffs unfounded.

Of course, it would be of little consequence if Germany alone reduced the amount. The European competition stieße in this gap. But the federal government must finally their blockade in Brussels give up an EU-wide quantity limitation.

But she does not want, because it shuns such interference in the supposedly free market as the devil Holy water. In the eyes of Minister Schmidt, farmers’ association and dairy industry, the state must pay – as for accident insurance contributions for farmers. But he is sure not ask anything. Typically neoliberal up.




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