European dairy farmers are calling for significant changes to European Union agricultural policy, seeking stronger protection against milk prices that fall below the full cost of production.
The European Milk Board (EMB) has outlined several policy proposals aimed at improving producer bargaining power, preventing severe market downturns and creating mechanisms to respond earlier to dairy market crises.
Full Production Costs as a Price Benchmark
A central demand from the EMB is for the revised Unfair Trading Practices (UTP) framework to explicitly prohibit the purchase of agricultural products at prices below their full production costs.
The organisation argues that the calculation of production costs should include all relevant expenses, including farm labour, operating inputs and capital depreciation.
The EMB also wants these protections to apply broadly rather than being limited by farm size, processor turnover or contractual exemptions.
According to the organisation, stronger enforcement would also be required. It has called for effective regulatory oversight, financial penalties capable of deterring violations and statutory whistleblower protections for farmers who report non-compliance.
Proposal for Early Market Intervention
The EMB is also seeking changes to the way the European Commission responds to dairy market volatility and supply imbalances.
The organisation has pointed to the EU’s voluntary milk production reduction programme introduced during the 2016 dairy crisis as an example of a mechanism that can help address oversupply and falling prices.
Under its proposed Market Responsibility Programme (MRP), the EMB wants elements of this approach to become part of the EU’s permanent crisis-management framework.
A central proposal is an automatic early-warning mechanism that would identify deteriorating market conditions and trigger production adjustments before dairy farms face severe financial distress.
| EMB Policy Proposal | Intended Focus |
|---|---|
| Full-cost pricing protection | Prevent purchases below production costs |
| Comprehensive cost calculation | Include labour, inputs and depreciation |
| Stronger enforcement | Improve compliance with trading rules |
| Financial sanctions | Deter non-compliance |
| Whistleblower protection | Protect producers reporting violations |
| Early-warning mechanism | Identify market crises earlier |
| Production adjustment | Address severe supply-demand imbalances |
| Standardised contracts | Strengthen farmer-buyer negotiations |
| Cost and market indices | Link contracts to measurable conditions |
Changes to CMO Regulations
The EMB has also welcomed amendments proposed by Members of the European Parliament concerning the Common Market Organisation (CMO) framework.
The proposed changes would use full production costs as a reference point for certain market intervention measures.
The producer organisation is seeking support for these amendments within the European Parliament’s Committee on Agriculture before they proceed to negotiations with the European Council.
The legislative process could determine how the EU’s dairy crisis-management system responds to future periods of oversupply, falling prices and rising farm costs.
More Standardised Contracts
Another major part of the EMB’s proposal involves milk supply contracts between farmers and buyers.
The organisation is calling for standardised and legally binding contractual terms that include objective market and production-cost indicators. It also wants contracts to contain dynamic revision clauses that allow prices to change when major costs such as feed, energy and labour increase or decrease.
Such mechanisms could provide producers and buyers with a clearer framework for adjusting milk prices as market conditions change.
For farmers, the objective is to create greater transparency around how milk prices are determined and strengthen their negotiating position with processors and other buyers.
Focus on Dairy Sector Stability
The EMB’s proposals come amid continuing discussions in Europe over how agricultural policy should balance market competition, consumer interests, processor requirements and farm-level economic sustainability.
The organisation argues that intervention mechanisms should operate before market conditions deteriorate to a point where farms face significant financial losses.
Its proposals would require changes across several areas, including trading practices, crisis management, contracts and market intervention.
The debate over the future of the EU dairy policy framework is expected to continue as European institutions consider amendments to agricultural and CMO regulations.
For dairy producers, the outcome could influence how milk prices are negotiated, how production costs are recognised and how the EU responds to future market disruptions.
