The result of the end of milk quotas

Froggy September 2015

French farmers

French farmers have spent the summer in disputes over the price of milk, pork and beef.  They demonstrated, blocked motorways and access to supermarkets or headquarters of food firms, and demanded help from the government.

The government intervened by setting a minimum price for milk and pork.  Supermarkets say they have accepted that price, but that the intermediate firms that actually buy from the producers have not.    In the case of pork, the two main buyers of pigs have simply refused to turn up to the main sale of animals (in Brittany), with the result that the price of pork could not be set, and a large number of animals were left unsold and returned with their owners.

The problem is not new.  Technology enables a vast increase in production, which results in more milk and pork than can be sold.  Until April this year, milk quotas restrained the production of milk.  Now farmers are free to produce as much as they like, or, in other words, obliged to run the race to produce as much as possible.  

French farmers blame German and Spanish farmers, who also complain that they are in a difficult position.  Each looks at their neighbour and complains about the low wages they pay, their less stringent environmental laws etc.      

All are also confronted with a drop in export: a large drop in Chinese demand for their product, and   the Russian ban on European goods following the imposition of sanctions.

By adopting the free market, European has fragmented: when there were quota, the different countries were not in competition with each other to the same extent.  The ending of quotas has led to a race to produce the most, and to conquer the greatest share of the market, with inevitable debt (to modernise and increase production) and financial difficulties.  

There was a beginning of a European solution to the milk problem.  There were differences between countries: different environmental and social regulations, or at least differences in how regulations were implemented; different countries had a greater or smaller number of small or less automatized farms, some governments subsidised more or less.   The quotas permitted the survival of smaller farms and therefore limited the competition between countries.     Now each country is fighting against all the others in the struggle to sell milk and pork.  EU Agriculture Ministers are meeting on 7 September to discuss the crisis.

This fight will intensify with the EU-US trade ‘partnership’ treaty, TTIP, which aims to harmonise regulations and create one European-American market.  Those who have the biggest and most mechanised farms will produce the most cheaply and sell the most.  Their erstwhile competitors will disappear.

French farmers union    

The biggest farmers union (FNSEA) wants large scale mechanized production; its leader reportedly owns a large chicken processing concern, importing cheap poultry from Brazil.  Smaller unions (Confédération Paysanne) defend small scale production; its programme is, to summarise: fix prices to cover costs, stop producing for export, develop meat quality, stop importing meat.  All impossible with a liberal government.

The National Front’s reaction is to protest against Germany and Spain using the Posted Workers Directive to employ foreign workers at reduced rates; to make compulsory the labelling of origin of meat products, in order to enable customers to choose French products; to encourage local authorities, hospitals etc to use French products in their catering, a preference allowed by law;  call into question sanctions against Russia, cause of the boycott of European products, and fight TTIP.  These suggestions are in fact not radical and would not solve the problem.

TTIP will be the extension of the European free market to include the United States, and will make the situation worse for smaller European farmers.  Nevertheless it may happen; voices are raised against it, but so far they are a minority.  The population has an instinctive sympathy for the milk and pig farmers, as they have towards those whose livelihood is threatened, but it is skin deep.  They are fatalists and accept that progress and technology are necessary and inescapable, and in a sense good.  People have so far accepted that being modern and technologically advanced is good and that you shouldn’t help those who cling to slower ways of producing.  The fastest and most efficient way of doing something must be adopted, especially as it is the way to make the most money.  Grouping animals together in one place, off the ground, surrounded by automatic distributors of fattening food, is the quickest and most efficient way of producing a 120 kg pig, so it’s now the only way to do it.

There are problems with it, that is, production that goes beyond what the market will absorb: degradation of animal welfare, the production of amounts of waste that ruin the land and the sea.  So far only the first problem (produce not finding a market) causes widespread unrest, among those directly affected.

The Pope’s 2015 Encyclical, Laudato Si, goes in the right direction; the radio station Europe 1  (28.8) quoted his rejection of unthinking approval of technology and greed as a sensible and important thing to say.