Froggy October 2009

Where have all the cows gone?

‘When this system [of regulating milk production] is finally dismantled, […], the gloves will come off and Britain’s redoubtable diary farmers can take on their foreign counterparts on a level playing field for the first time.’  So says the British milk industry with Dairy UK.  They also want fewer milk producers in Britain: ‘the UK’s dairy supply chain is one of the leanest and most efficient in the world’ and will be even more so with ‘further mergers’ and ‘consolidation’.

The average size of herd in the UK is 112 cows, and growing; this means that herds have between less than five animals and several thousands.   The EU (EU 15) average is 45.  The yield per cow is also much higher than EU average.  

Unlike on the continent, the organisation represents both the producers and the distributers; Dairy UK ‘represents the interests of dairy farmers, producer cooperatives, manufacturers of dairy products and processors and distributors of liquid milk throughout the United Kingdom.’

Between them Dairy UK’s members collect and process about 85% of UK milk production.  How they can represent the interests of farmers they want to see go out of business is not clear.  The processors are clearly dominant in the organisation. 

There is milk and milk; sentimental readers should stop reading now, as it is perhaps disillusioning to realise that there is battery milk as there are battery eggs.  The industry distinguishes between milk-from-grass and other milk, and Ireland and New Zealand are apparently known for their milk-from-grass production.

In Britain some cows are indoor reared and some are out to grass at least part of the time.  The processing industry prefers the former type as their product is more consistent: the cows’ life and feed are unchanging, unlike that of the cows that go from field to milking shed and eat grass at one time and silage at other times, as well as supplements.  Dairy UK boasts that 85% of British milk complies with the Farm Assured scheme, but that scheme says nothing about being outside eating grass, only that the feed must comply with regulations (to avoid more mad cow disease).  Organic milk in Wales is produced by cows that ‘have access to outdoors, weather permitting’, which does not sound too convincing.

On the Continent all is not green grass either; and the question of prices paid to producers is also acute.  The difference is that small farms still exist, and that producers have an independent voice and want more regulation not less.  They have in fact several voices, unions and defence groups; some of those are affiliated to the German based umbrella organisation the European Milk Board (EMB) which campaigns for a regulated milk industry, against the present EU Commission which wants to gradually remove quotas, i.e. limits on how much can be produced, by 2015.

The EMB takes as a model Canada, which has an elaborate system for fixing the price of butter and skimmed milk powder; provincial marketing boards then use the nationally agreed price to establish the price of industrial milk in each province.  The price also varies according to end use, (whether the milk used for drinking or for turning into powder or casein); this must encourage the food industry to use products derived from dairy rather than derived entirely from the chemical industry.

A White Day

Friday 18 September was a ‘White Day’ in much of Continental Europe when milk producers spread one day’s production in fields in protest at the low prices they receive.  Le Monde describes this as a crisis symbolising the two farming Europes: all of Europe, against the Nordic countries, Britain and Italy, have as an ideal farms spread throughout the territory of the country, implying a smaller size of farm, more farm jobs and the possibility of family run farms.  

At the moment EU policy in this matter is in the hands of the Danish commissioner for agriculture Marie-Ann Fischer Boel who favours the end of quotas.  Her response to the crisis is to help milk producers in difficulty to leave the industry.  She is due to leave her post soon but Denmark wants to hold on to the post and remain in charge of agriculture.  Whose influence is determinant in the EU institutions?  On this example, it seems that a commissioner has a lot of power to determine the future of agricultural jobs in Europe.

The French minister for agriculture favours regulation and is working with his German counterpart, a Bavarian, in this direction.  They have the support of sixteen other countries. Can their combined influence overrule the commissioner?  (Answer: no.)

Farming unions

There are several farmers unions in France, as you would expect.  The principal one is the only one entitled to sign agreements, and it did sign an agreement in June on the price of milk, unwillingly since it recognised it was too low.  Some farmers tore up their membership cards as a result and turned to other groups that recommended strike action against the advice of the main union and of other smaller unions.  Striking is a way of losing money and could well do the job that the liberalisers want, that is, remove the financially weaker farmers from the scene.  The strike leader in France, Pascal Massol, is a long haired trendy  (compared to the people in his audience of farmers); in his speech on the strike he said farmers wanted to keep in their vocabulary words like ‘pasture, hay, dew, storm, pitchfork, cream, cock and even manure’.   The website of his movement starts with a quote from Marcel Aymé: ‘Social injustice is so obvious and familiar, its constitution is so robust, that it can easily seem a natural thing to those who are its victims.’  

His movement is not a union, but an association affiliated to the serious farmers group the European Milk Board who aims to unite milk producers to put up a strong front against the dairy industry and food retail trade, to communicate with consumers and to introduce a flexible control of volumes to adjust the volume of milk to market demand.  It has members in twelve countries and cooperates with others.  Wales, Scotland and Ireland have organisations members of EMB, but not England or Britain as such.

It is not campaigning to a return to milk-from-grass.  The French system of ‘Appellation Contrôlée’, which stipulates that a product can only bear its brand name, e.g. Champagne, if it has been produced in a certain area or in a certain way, applies to some cheeses, which have to be produced exclusively with milk-from-grass.  Their price make it luxury items.  Obviously that milk is more expensive to produce.

People who sneer at fast food welcome cheap food for themselves under the hypocritical pretext that the poor need cheap food.  But most people in Europe are not poor and could pay a lot more for food; this would sustain a better way of life for farmers and reintroduce the idea of quality and luxury as part of eating.  It seems that it is the poor who suffer the most health wise from the generalisation of industrially processed food.

A war of two systems

In Europe we have a war of two systems.  Britain versus Germany once again.  The fight between two conceptions of agriculture has been going on since the beginnings of the Common Market and needs to go on.

The fight is not just for milk of course.  The fight for state intervention and regulation applies to industry too.  As a Financial Times journalist writes about Angela Merkel’s successful effort last week to broker a rescue deal for the Opel car manufacturer, part of General Motors: ‘The bail-out has been cheered in Germany – but greeted with horror in Belgium, Britain and Spain – all of which fear that it means that the axe will fall on car plants in their countries. In theory, EU rules on state aid are meant to prevent beggar-thy-neighbour subsidies. Germany used to pride itself on being scrupulous about obeying Union rules and respecting the sensibilities of smaller EU countries. But, in a deep recession, old instincts about the importance of industrial policy and the car industry have trumped worries about Germany’s international obligations.’

This matters because ‘in a globalised economy, it is hard to have ‘state capitalism’ in one country – particularly when that country is as central to the world economy as Germany, Europe’s largest economy and the world’s second biggest exporter.’