Browse > Home / Archive: August 2015

| Subcribe via RSS

Crying Over Milk

By Editor
August 8th, 2015 at 11:50 am | Comments Off on Crying Over Milk | Posted in Economics

A reminder that this year’s milk price crisis is principally the result of the ending of previous market rigging. Harsh as it is on the dairy farmers, there are simply too many of them producing too much milk, too expensively, in relation to demand for milk from consumers. They are not inefficient, or at least most are not. There are just too many.

A ‘consumer’ campaign to raise prices, in that regard, is pointless. The idea behind it is that retailers, their margins protected would then pay local farmers more. That is unlikely other than on premium speciality products that already command higher prices. Principally retailers would just enjoy higher profits. Competition for the provision of milk from across the EU would remain unchanged.

There’s no reason to think that combatting that with a ‘buy British’ or ‘save our farmers’ campaign would be any more successful for milk than any of the other attempts for similar products. Do you care if the cod in your fish finger was caught by a British trawler?

It could additionally turn nasty with retailers and importers being bullied, a tactic familiar to the agricultural sector in France. Some of the MP and candidate tactics clearing shelves in shops at the moment, are some distance from les moutons enflammé. But the principle is the same, to intimidate free trade into submission. Bugger the customers. It is largely criminal and nasty producer racketeering, not a glorious expression of public concern.

What has to happen, and is going to happen, is that a large number of dairy farms need to close or consolidate. That is going to be very brutal and unpleasant for the failed businesses, but it is no kindness to pretend otherwise with ‘look at me I’m campaigning’ faux-empathy.

Nor is it any worse for farmers than any other changing industry. Bar the exception that European Governments, including our own, have made the transition more jarring than it needed to be by rigging the market for so long. Something familiar to former miners, dockers, and soon postal workers. Thanks politicians… good job.

Politicians today then might then consider more emphasis on the transition support for those leaving the market. And a little less histrionic poujadism, which will leave those who will need to get out far less ready to change. Beware of politicians bearing campaigns. They are not always your friends.