EU ag commission rejects calls for reduced milk quotas

By CONSTANT BRAND
Associated Press

BRUSSELS (AP) -- Hundreds of angry Belgian farmers blocked streets with tractors and faced down police outside the European Union's headquarters Wednesday, July 22, demanding officials help reverse a recent collapse in prices of milk, cheese, butter and other dairy products.

They called on the EU to lower the amount of milk a European is allowed to produce each year to ease a glut that has caused a 50 percent drop in milk prices over the last year and forced the farmers to sell below cost.

The demand was rejected by EU Agriculture Commissioner Mariann Fischer Boel, who said the farmers should instead be given relief grants and loans more quickly.

EU governments agreed last year to phase out milk quotas by 2015 a process that has already led to higher production limits.

"We will not reverse our policy of gently phasing out quotas," she said.

But Fischer Boel said higher quotes were not to blame and milk production was 4.2 percent below the overall limit because of lower demand during the global financial slump.

"The real reason for the crisis is certainly the economic situation in which consumers find themselves," she said.

The protest remained peaceful, but farmers caused traffic mayhem across the Belgian capital, blocking avenues and streets with their tractors.

Riot police with water cannons stood guard behind barbed wire and blocked all roads to the neighborhood housing EU headquarters.

The farmers drove their tractors up to the police lines.

"Our problems are quite serious," Yvan Hayez, secretary general of the Walloon Agriculture Federation, which represents farmers in French-speaking Belgium, told reporters after talks with Fischer Boel. "We don't believe that the proposals presented ... will help solve the problem."

He added farmers were struggling to make ends meet after the prices dropped this year. EU figures showed a 50 percent drop in prices.

Milk prices dropped on average from a high of around 57 cents per quart in the fall of 2007 to around 28 cents per quart now, according to EU statistics.

The EU farm chief suggested that EU nations store unsold butter and powdered milk longer to reduce supplies and better promote milk to consumers.

She also recommended early retirement buy-outs for farmers and suggested governments look at encouraging the slaughter of large dairy herds to reduce production.