Milk farmers vent fury at militant demo in Brussels

The younger farmers hurled bottles, bags of grain and potted plants at a phalanx of riot police with shields and gas-masks at hand, while razor-wire barricades protected the council building and water cannon lay ready in case the trouble escalated.

Following a peak in milk prices in mid-2008, world markets have seen a sharp decline. A recent drop of some 40 percent has pushed milk prices to 1992 levels. The development will have robbed European dairy producers of some €14 billion by the end of the year, according to Copa and Cogeca, the European farmers' associations.

A litre of milk currently costs 40 cents to produce, but farmers cannot sell for more than 20 cents, with the trade associations warning this will push thousands of their members into bankruptcy if robust action is not taken soon.

According to the European Milk Board, since Autumn 2008, the European milk market has been under considerable pressure from volumes, with milk supply exceeding demand.

Health check

The European Commission has been trying to stabilise the market since the beginning of this year by re-introducing export refunds and storing vast amounts of butter and milk powder. The producers warn that this has cost millions of euros, but has not prevented the slump in prices.

The dairy farmers are opposed to an agreement taken by EU member states in November 2008, as part of the "health check" - or reform - of Europe's Common Agricultural Policy, which would see milk quotas gradually increased ahead of their abolition in 2015. They say this has flooded the market and destroyed prices. Instead, they want quotas cut by five per cent in order to drive up prices.

France and Germany have said that they favour additional export subsidies to boost price levels. A total of 19 member states back the proposals, but they are being resisted by the UK, Sweden and the commission.

In the end, the informal meeting of agriculture ministers backed a plan to establish a high-level expert group that would examine medium to long term measures to aid the sector. The group will consider contractual relations between producers and dairies, different market instruments, transparency, innovation, and dairy market futures.

Agriculture commissioner Marion Fischer-Boel told reporters after the meeting that there was "widespread" support for the high-level group and that there will be "no rolling back on the health check, which the commission considers of the utmost importance.

The expert group will start its work next Tuesday with a deadline of June 2010.

She said that following the decisions that have already been taken to support the farmers "We can already see a positive influence on prices. It appears to be going up in some member states more than others, but the trend seems to be fairly stable."

Taking a milk bath

Benedict Franquin, a farmer from Strasbourg told EUobserver that milk prices had dropped to such a level that he could almost save money by giving his children a bath in milk. A photograph of two toddlers in a plastic blue tub filled with frothy milk adorned his placard.

"The game Marion is playing with us cannot continue. What she proposes will only make the smallest farms - the family, peasant farmers - disappear in favour of the most powerful," he said. "This will not only destroy the family farm, but the quality that goes with it. It's incredible, this form of dogmatism."

The farmers want the EU to abandon plans to scrap milk quotas and are demanding the creation of a new European agency to orchestrate supply and demand for milk.

They also want additional measures to be taken to help stimulate demand, such as using skimmed milk powder for animal feed and re-implementing temporarily community schemes for butter disposal, such as into pastry. In the medium to long term, the farmers are also looking to measures to strengthen the position of producers in relation to the supermarket giants.

While the amount retailers are willing to pay for milk products has tumbled, the price consumers pay has hardly budged.

"EU farmers are furious. Fourteen billion euros of their income is being re-distributed amongst other stakeholders in the food chain, especially retailers," said Copa President Padraig Walshe in Brussels.

"EU farm ministers must take rapid political decisions to help bring the EU dairy sector out of crisis. Without radical action, more farmers will go out of business and there will be a further exodus from rural areas."

The Brussels protests have become something of a regular occurrence in the EU capital, with similar protests taking place in June, while in September, farmers dumped some 3 million litres of milk onto Belgian fields.

In the past week, farmers stepped up their protests in nine EU countries, with thousands giving milk away to consumers, and organising picnic events or demonstrating with tractors.

EU agriculture ministers will meet again in Luxembourg later this month to discuss additional supports.