Milk and milk products
The European Commission's legislative proposal on "contractual relations in the milk and milk product sector", presented on 9 December 2010, aims to boost the position of the dairy producer in the dairy supply chain and prepare the sector for a more market oriented and sustainable future.
The Commission also presented a report on the dairy market within the context of smoothly phasing out the milk quota system.
The 'Milk Package' proposal
Content
The European Commission proposal on "contractual relations in the milk sector" aims to boost the position of the dairy producer in the dairy supply chain and prepare the sector for a more market oriented and sustainable future. It provides for written contracts between milk producers and processors, the possibility to negotiate contract terms collectively via producer organisations in a way as to balance the bargaining power of milk producers relative to major processors, specific EU rules for inter-branch organisations and measures for enhancing transparency in the market.
The measures are proposed to be valid until 2020 with two intermediate reviews.
Appropriate size limits for collective negotiations and other specific safeguard measures should ensure the achievement of the objectives of strengthening the bargaining power of milk producers whilst safeguarding competition and the interests of SMEs.
>> Read the legislative proposal 
[61 KB] 
>> Read the citizens' summary [26 KB]
>> Watch Commissioner Cioloş' press conference
>> Watch extracts of Commissioner Cioloş' presentation at the European Parliament (COMAGRI)
>> Read Commissioner Cioloş' speech at the European Parliament (COMAGRI) (in French)
Context
The High Level Experts' Group on Milk (HLG) was created following the 2008/2010 dairy crisis with a view to looking at medium and long term measures for stabilising the market and producers' income and enhancing transparency. The HLG found important imbalances in the supply chain, an increasingly concentrated industry dealing with many and dispersed milk producers and an uneven distribution of the added-value. This situation has led to a lack of transparency, rigidities and problems of price transmission in the supply chain.
The proposed measures stem from the recommendations issued by the HLG and endorsed by the Council's Presidency conclusions of 27 September 2010.
>> Read more on the High Level Experts' Group on Milk
What happens next?
After discussions in the Council of Agriculture Ministers and in the European Parliament and following adoption by these institutions, the proposals are expected to come into effect in 2012.
The report on the phasing-out of milk quotas
The Commission has also adopted a separate report on the dairy market situation and the consequent conditions for smoothly phasing out the milk quota system. With only 3 Member States (DK, NL, CY) having produced more than their quota in 2009/2010 and milk quota prices now having a very low value, already zero in some Member States, the report concludes that soft landing is on track in an overwhelming majority of Member States.
Under these circumstances, it concludes that there is no reason to revisit the Health Check decisions with regard to the gradual increase in quotas and the end of the quota regime on 1 April 2015.
To further pave the way towards quota abolition, the Commission raises for consideration the organisation of meetings gathering experts of the Management Committee for the single CMO with the Advisory Group on Milk in order to assess market developments and prospects.
A second report is scheduled for 2012.
>> Read the report [120 KB]