Tuesday, November 27, 2012

Milk protests in Bussels

The main reason I first learned agricultural economics is that the advisor of my model airplane club had a day job trying to sell memberships for the National Farmer's Organization.  I soon discovered that I would rather listen to him talk about the NFO because I could easily solve my own model-building problems and so much preferred to hear his explanation of how farmers made a living—and he had a well-organized rap.  The NFO had a lot of dairy farmers in its membership so was pretty radical and concentrated all their efforts towards raising the prices and keeping them consistent.

The main problem facing dairy farmers is that their product, while very desirable, it also highly perishable.  This means that if they wish to reduce their excess supply, the only realistic option is to dump their milk.  So the goal of dairy farmers facing a price crunch is to waste their milk in dramatic ways.  There were many incidents of violence associated with dumping actions during the Depression.  But what the dairy farmers pulled off in Brussels would warm the heart of any NFO organizer.  Those fancy European Parliament offices will probably smell like spoiled milk for a while because the farmers sprayed milk with some high-pressure hoses.

All this points to a global problem.  The prices for grains go up because of climate change.  The prices for milk products don't have room to rise because incomes in most markets are falling for most people.  So folks like dairy farmers get caught in the middle.  They have fixed operating expenses.  I cannot imagine very many of them are covering their costs these days.

Milky day: Farmers dump thousands of liters of milk on Brussels police, European Parliament

27 November, 2012

Dairy farmers poured 15,000 liters of milk on the European Parliament building in Brussels, Belgium, in a protest against plummeting food prices. Police resorted to tear gas and water cannons to disperse the milk-spraying crowd.

About 2,000 dairy farmers from all over Europe gathered outside the European Parliament (EP) building, blocking traffic along several of Brussels' busiest streets.

The two-day protest, dubbed 1,000 Tractors to Brussels, was put together with a view to convincing politicians to take what its organizers call “efficient legislative measures” for the milk market.

"We have a European Parliament that hasn't made a move in years. We want new laws that will give insurance for our future,'' said Roberto Cavaliere from of the European Milk Board, which coordinated the protest.

To make their demands heard, farmers showered the EP's doors with milk launched from cannons.

Despite even that, the demonstration was peaceful until farmers tried to storm the fence of the EP building.

Police forces blocked their way, so the farmers switched the aim of the milk cannon against the police.

The first round of a milky battle finished with no casualties or arrests, but the demonstration is still going on as the dairy farmers plan to stay outside parliament until Tuesday afternoon.

"Politics are really killing us. It has to change very quickly at the European level,'' said Belgian farmer Julien Husquet. "'The way it is going, we are in big trouble.''

The farmers are demanding a 25 per cent increase in the retail prices of their products, which are now sold cheaper because of less international demand and increased competition.

According to the European Milk Board, thousands of dairy farmers have been forced out of the market since 2009 – and if the bloc's agriculture policy remains unchanged, more risk losing their businesses.

The EU's agriculture ministers are expected to meet on Wednesday to discuss reforms to the industry. more

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