European policymakers must provide farmers with the tools to supply a growing demand for dairy products worldwide, NFU dairy board chairman Mansel Raymond has warned.

Speaking at meeting of the EU farmers’ organisation Copa-Cogeca in Brussels Mr Raymond said the sector had to be more market focused to help stem the flow of farmers quitting the industry.

He told the 400 delegates that urgent action was needed as a quarter of a million European dairy farmers had left the sector since 2007

“Low and volatile milk prices, environmental regulation and little potential to grow are the main reasons why milk producers are getting out of the industry,” said Mr Raymond.

“For too long producers have had no choice but to sell milk below the cost of production – this is unacceptable,” he said.

“Given the CAP budget reductions, farmers need to obtain a realistic return from the market which covers their costs of production so that they can continue to develop their businesses. Quotas are going – this is right in a globalised market – but the EU has a number of other tools in its box,” Mr Raymond said.

Priority should be given to the full implementation of the milk package, agreed by the EU in 2012, which set out a framework for fairer contracts and rules to encourage producer organisations to balance the power of milk buyers, he said.

“Contractual relations play a vital role in giving more predictability to milk producers as far as the volume, price and duration are concerned,” Mr Raymond said.

He added that retailers needed to act more responsibly towards milk producers and to secure the long-term supply of milk for consumers across the EU. The increased role of producer organisations and the EU’s support in this area will also be essential,” Mr Raymond said.

“Market management tools – such as public intervention and private storage – are also of primary importance to help dairy producers cope with the effects of extreme market volatility,” he told the meeting.

“Important free trade talks are on-going between the EU and the US, Canada and other markets which could have important ramifications on our industry. The EU must defend our sector interests so that we can take advantage of new markets with our high quality products.”

“The European dairy industry represents 13% of the turnover of the total food and drink industry in Europe This shows the importance of the industry and why we must support it,” he said.

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