Farming groups have criticised the EU’s emergency milk market measures for not going far enough.
The European Milk Board (EMB) and UK group Farmers For Action (FFA) have said steps to help the dairy sector cope with Russian ban on Western food imports could cause problems in several months’ time.
On Thursday, EU agricultural commissioner Dacian Ciolos announced private storage aid for butter, skimmed milk powder and cheeses to ease the oversupply.
Under the scheme, the European Commission would cover some of the cost of dairy companies storing products for three to seven months, keeping them off the market temporarily.
In the first half of 2014, Russia bought 29% of EU cheese exports and 26% of butter shipments.
EMB president Romuald Schaber said the fact the commission had reacted to the ban was important, but the solution was insufficient.
He said the market should be stabilised by EU-wide voluntary cuts to production on dairy farmers.
“The crisis aid should be used in a way to serve as an incentive for farmers to produce less milk,” he said.
“Otherwise these excess quantities will prevent recovery of the milk market in the long term and cause serious harm to agriculture.”
Mr Schaber said countries should cut production by about 2% over the next three months and, if this were not possible, milk quotas could be lowered to tighten supply before they expire in April 2015.
In a statement, FFA said the EU’s measures were welcome but would only put off problems for a few months.
“Stockpiling or storage achieves nothing because at some point that product has to come on to the market,” FFA said.
“Our fear is if it runs its full course and comes out in seven months’ time that will be bang on the start of a new milk year and this is likely to depress prices going into 2015.”
FFA has launched a petition to the UK government, asking it to use CAP money to buy up the high stocks of dairy products and distribute them through food banks.
Trade association Dairy UK was more positive about the EU’s decision to open private storage aid.
Dairy UK chief executive Dr Judith Bryans said the measures should prevent the oversupply of dairy products and help to stabilise the market.
“It will also give more time for the global dairy market to adapt to recent developments and absorb the impact of the ban,” she said.