Communique from the 58th meeting of representatives of Chambers of Agriculture of the Visegrad Four, held in the Slovak Republic
Representatives of the Agrarian Chamber of the Czech Republic (AKČR), the Hungarian Agricultural Chamber (NAK), the National Council of Chambers of Agriculture of Poland (KRIR) and the Slovak Chamber of Agriculture and Food (SPPK) met at the 58th meeting of representatives of Chambers of Agriculture of the Visegrad Four (V-4), held in the Slovak Republic in Červený Kláštor, on 09th-10th September 2015.
Representatives of chambers discussed the following points:
1. The situation in the milk sector and possible solutions of the current situation.
2. The current situation in agricultural markets, with an emphasis on the results of the harvest 2015.
3. Elections to the bodies of COPA-COGECA.
The dairy sector represents a very important part of agriculture in V-4 countries and is a major contributor to employment. Representatives of the Agricultural Chambers of the V4 countries expressed their concern over the development of the current situation in the milk sector. The increase in milk supplies on the European and world markets, the abolition of milk quotas by 01/04/2015 together with the Russian embargo caused a large drop in purchase prices across the EU. In 2015, there was a significant fall in prices below cost of production. At the current level of purchase prices there is created loss for many primary producers and many of them are forced to terminate production. Expert analysis show, that the reasons for these losses are not high cost, but low incomes. Representatives of the processing industry report as a reason for the low purchase prices, the pressure of retail chains, who abuse their dominant position at the market. At the same time, margins of retail chains are still growing.
The current situation is a major threat to the future of the sector not only in the V4 countries, but also in most of the EU member states. Prices of raw cow milk are the lowest since 2009. Those who have invested and have modernized production are currently in a very disadvantageous position. In case, that the European Union will not act, representatives of Chambers of Agriculture of V-4 are afraid, that the situation may even worsen in the autumn, due to the expected increase in costs. The situation is complicated by the worse harvest of forage and given the current state of the maize it is also possible to expect increase of prices for grain feed.
Representatives of Agricultural Chambers of V-4 countries are not satisfied with proposal of European Commission concerning level of support for resolving of current crisis at the agricultural market. Proposed financial help is good start of dialogue and it indicates, that politicians start to take situation seriously, but concerning the last proposal on financial support, proposed measures are according to opinion of participants of V-4 meeting, expression of shameful misunderstanding of seriousness of the situation.
The total impact of the Russian export market loss is estimated to be worth 5,5 bilions euros annually. Additionally, the European farmers´ incomes were further hit by market fluctuations caused by the termination of the quota regime and also by serious problems with draughts.
The participants of the V-4 meeting welcome initiatives from the Copa-Cogeca, and are pleased, that the Commission proposed some of the money from the huge 900 milion superlevy bill charged to farmers to return to the sector, but we are also disappointed, that not all budget will go back to milk sector. The Visegrad Four countries welcome the fact that farmer’s direct payments will be advanced to help improve their short term cash flow problems. For the above reasons it is necessary to support dairy farmers with all available means. Representatives of Chambers of Agriculture of the V-4 therefore propose the following measures at the EU level, which could improve the situation in the milk sector:
1. Compensation for losses of dairy farmers from the EU
The EU should compensate for the loss of dairy farmers incurred by significant decline in purchase prices. Compensation would be paid out of funds for exceeding milk quotas and other additional sources;
Representatives of V-4 are convinced, that whole amount of 900 milions gained from milk superlevy should be dedicated for help in milk sector. Division should be proportionally divided within member states according to drop of prices.
Compensation should be paid from sources other than the CAP budget, so the direct payments are not affected. The termination of the quota regime and Russian retaliatory embargo are not European farmers’ fault. Despite this fact, they bore the brunt of the negative effects of both decisions.
2. Compensation for losses of dairy farmers from the EU should be primarily distributed among farmers in those member states, which have experienced a price drop bigger than 18 %.
3. Increased security for primary producers through the so-called "Safety net" of the EU.
It is necessary to increase the intervention price of milk and dairy products and find new solutions out of the CAP measures to secure the market.
4. The reintroduction of export subsidies and strengthening of programmes promoting the consumption of fresh milk and dairy products within the EU market. It is also vital to search for new potential markets for dairy commodities and long-life dairy products with high added value outside the territory of the European Union and boost promotion activities for those products on such markets through appropriate programmes both at Union level and at Member State level
5. Strengthening and increase of the resources of the programmes of the Common Market Organisation (CMO) falling under the “School Milk Scheme” in order to provide school children and youth with a healthier alternative to sweetened soft drinks.
6. Improving the transparency in the dairy chain and eliminate unfair practices of retail chains to prevent abuse of the dominant position of the retail chains through European legislation.
Representatives of Chambers of Agriculture also confirmed the necessity of introducing support measures at national levels.
Economic situation of farmers in European Union is dire and therefore participants of V-4 meeting support Demonstration which took place in Brussels on 7th of September 2015 organized by COPA-COGECA and they urge European Commission to take necessary measures to increase the profitability of agricultural production.
Participants evaluated the current situation in agricultural markets of V4 countries. Harvesting season was one of the driest in recent years. Record temperatures accompanied by low rainfall caused water shortages in some areas. The harvest has been excellent, in some areas reached a record yields, but in other ones did not reach even the level of last year. Harvest due to hot and dry weather was carried out quickly and without major problems. However, drought adversely affected the fodder and autumn crops, there is expected significant drop of maize. In some areas, the drought also caused worse quality of the cereals, especially in non-irrigated areas. The prices of cereals and oilseeds showed a slight decline. At the same time, however, the markets react to the decline in fossil fuel prices and the fall of shares on the Chinese stock market. As for the potatoes, hops, fruits and vegetables can be clearly expected lower production.
The participants agreed that the next meeting of representatives of Agricultural Chambers of V-4 will take place on 25th-26th of November 2015 in Hungary.
Communiqué was issued in five copies, each delegation received one original copy and one original copy will be sent to organizations COPA-COGECA.
President of AKČR
President of NAK
President of KRIR
President of SPPK