Representatives of the Hungarian Chamber of Agriculture (NAK), Slovak Agriculture and Food Chamber (SPPK), National Council of Agricultural Chambers in Poland (KRIR) and the Agrarian Chamber of the Czech Republic (AKČR) met at the 61th meeting of Agricultural Chambers of Visegrád Group (V4) states in Židlochovice (Czech Republic) on 9-10th June 2016.
Representatives of the Visegrád Four’s Agricultural Chambers debated the current dire situation on agricultural markets. Particularly the situation of pig and dairy farmers is extremely difficult and showing little to no sing of relief. Slight recovery of prices of pork may very well be only temporary and the price of pork is still significantly lower compared to last year’s prices at the same time.
The representatives of the V4 chambers of agriculture have in this regard made themselves familiar with conclusions from the recent meeting of the Visegrad Group prime ministers and agreed that they welcome their acknowledgement of the situation and their determination to help the farmers in need.
Moreover, according to some estimates, the farmer’s price for milk is going to remain low throughout the remainder of this year and is not likely to recover any time soon considering a rapid year to year growth of milk production almost exclusively in the states of EU 15. The overproduction in these countries combined with the loss of the Russian and a slow-down of Chinese markets have caused a massive influx of milk products from Western Europe to Central and Eastern Europe, which has in turned contributed to even steeper decline of prices in the countries of Visegrád Four.
Despite being for the better part responsible for the current situation, The European Commission has still not come up with any viable solution to the recent slump of prices of milk. So called “measures” that have been presented thus far are both insufficient as they are unfair to the member states of the EU from Central and Eastern Europe. The current crisis caused by the decisions relating to the international politics must be solved at the European level; otherwise the Common Agricultural Policy forfeits its right to be called “common”.
As of now, individual member states are left to take the initiative, which means the solution of the crisis threatens to become a battle of national budgets and trade barriers quite possibly resulting in a scenario in which the individual countries cannot succeed equally. In order to prevent such a scenario, the European Commission must start taking the situation seriously as opposed to the previous negligence or even condescendence towards farmers and agriculture in general expressed by the bureaucrats of the EU . Such a reply proves that the European Commission is unable to solve our problems.
In order to at least partially redeem the situation the European Commission must immediately do the following:
1) Prepare an additional financial package of at least 1 billion € to be paid out as soon as possible with the preference of states with the biggest price slump. Allocated money should come from the sources other than the CAP.
2) Take all necessary steps to lift the Russian embargo and reopen the Russian market for EU agricultural products. The European commission should also utilize its diplomatic staff to re-establish lost markets and find new outlets for European agricultural production.
3) Revise reference threshold and increase the intervention prices in the milk sector by at least 10% for skimmed milk powder and by 25% for butter.
4) Increase the threshold for the envelope of voluntary coupled support (VCS) to at least 20 % of the I. CAP Pillar.
5) Promote and encourage exports by introducing export refunds for dairy products and pork, and export credits to permanently remove existing surpluses from the EU market.
6) Enable the EU member states to use agricultural commodities such as milk powder, cheese, butter, pork and/or poultry for developmental humanitarian aid for poor countries, food aid for refugees seeking protection in Europe and food aid for poor citizens of the EU member states (Fund for European Aid to the Most Deprived).
7) Prepare a common EU regulatory framework for combating unfair trade practices in the food supply chain.
As far as the position of the farmers in the food supply chain goes, it must be said that the situation of farmers and the food industry in our countries is further worsened by unfair trade practices of the retailers. Retailers tend to abuse their significant market power when dealing with suppliers, namely by driving the prices down and making the suppliers cover the costs of promotional activities and unsold merchandise.
Retailers also seem to prefer goods originating from the country in which their parent company is seated thereby encouraging rising imports of dairy products and meat which in turn push local products (albeit of equal or better quality) out of shelves.
A common European solution of unfair trade practices of big retailers must therefore be a part of the much needed systematic solution of declining incomes of European farmers. As of now, a decent share of money from Common agricultural policy, be it from EAGGF or EAFRD end up in the hands of retailers.
Prices of cereals and oilseeds on the markets have risen slightly in the past months only due to the complicated growing season which does not promise an above average yield compared with the last five seasons. Lower yields even for a better price will thus probably not be able to cover for the losses of dairy and pig sector. What is worse, the weather in the second half of May was very unpredictable with hailstorms, frosts and floods bringing severe damages not only to special crop cultures such as orchards and vineyards but to most common field crops as well.
The representatives of the Visegrád four’s chambers of agriculture also discussed the timetable by which the CAP’s subsidies were being paid out in respective countries in 2016 and agreed that due to the significant changes in the requirements of the reformed CAP, the farmers’ incomes were in some cases belated by more than half a year compared to previous habitual practise. Respective national ministries of agricultural and their payment agencies must be therefore be able to either handle the situation better in 2017 or strive for change of rules at the European level. The participants of the meeting also agreed that simplification of the CAP is crucial and the emphasis should be put on reducing the administrative burden on farmers.
The representatives of the V4 chambers of Agriculture also discussed the possibility of joint exhibition participation of all V4 countries “under one banner” at major European exhibitions.
The participants of the meeting agreed that the next meeting of V4 countries will be held in Slovakia in September 2016.
The Communiqué has been drawn up in six copies, one for each delegation, one copy will be sent to the European Commission and one to Copa-Cogeca.
Vice-President of SPPK
President of AKČR
Member of Board, KRIR
President of NAK