French MP’s have proposed a draft European resolution in a bid to help the continents’ struggling dairy industries.
The recommendations include a “price supervision system” which would allow milk prices to fluctuate between a minimum and a maximum figure to counter extreme price volatility.
As part of a voluntary scheme, farmers would be rewarded for reducing production in times of massive overproduction as has been seen recently.
The MPs also called for a redirection of CAP funds to create insurance mechanisms to act as a safety net for producers to prevent further reductions in dairy producer numbers.
The number of French dairy farmers fell by 83.5% between 1983 and 2013 to 70,500 producers and regulator FranceAgriMer predicts there could be just 40,000 left by 2030.
“Managing volatility will certainly help with oversupply,” said Tom Dunne, vice-president of European Dairy Farmers (EDF).
“But it’s only likely to be small money in terms of any funding allocated by the EU.”
He added, “It will be extremely difficult to get a unanimous decision on this in Europe as there is such a diversity of dairy industries, this won’t necessarily work for everybody.”
The French MPs report added the industry needed far more transparency, and prices should reflect milk’s final value to manufacturers, preventing the “absurd situation” where farmers receive prices far below the cost of production.
UK dairy farmers were paid on average 21.35p/litre for August, which is 3.7p/litre below the cost of production, according to figures from Kite Consulting and AHDB Dairy.
French farmers are paid significantly more, with the most recent statistics showing 24.59p/litre in July.
Suppliers of French processor Lactalis saw their prices rise by 7% at the end of August following days of milk price protests across the country.