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Different product, similar result

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    Different product, similar result

    Was reading this Scottish Farmer article and can't help but notice the similarity to the demise of the CWB. The same hollow ideology of the holy grail of global marketplace and the "dereliction of Government responsibility" as one person said.


    "NOW THAT Europe's milk quota system is no more, the big food conglomerates are going to 'fill their boots' on the back of an over-supplied buyer's market.
    That was the warning from the European Milk Board this week, as it led protests outside the European Parliament at the EU's failure to put in place any controls against a flood of over-production.

    "Thanks to the expected milk surplus, as of now conglomerates will dictate terms and conditions to the farmers even more than before," predicted EMB president, Romuald Schaber. "Prices will be rock-bottom, as Europe's farmers will have even less market power to achieve a cost-covering milk price in the future.

    "Without an effective crisis instrument, dairy farmers will be facing rock-bottom prices time and again; many of them will be catapulted out of milk production very soon."

    As the quota era ended at the turn of the month, dairy farmers from all over the EU held a solemn vigil outside the European Parliament - compete with fire and funeral march - to let the politicians know about their "dereliction of duty".

    "The system for the period after the milk quotas is severely deficient," said EMB vice-chairman, Sieta van Keimpema. "Unfortunately, politicians have failed to put suitable market instruments in place to prevent a crisis. It is most likely that dairy farmers in many EU countries will step up production considerably when the quota system ends - without the market being able to offload the whole volume in any reasonable way. Chronic price collapses are inevitable."

    By contrast, the European Dairy Association was delighted at the prospect of unlimited milk production after three decades of quota control.

    "The end of the milk quota is one more step in towards market orientation of the Common Agricultural Policy," said EDA secretary general Alexander Anton. "A step that has been prepared for in a political process that started in 2003. The dairy sector, dairy farmers and their milk processing companies are prepared for this step," he insisted.

    "Increased market transparency is key since it will allow all actors in the dairy sector to take the right business decisions and, in consequence, to better manage the price and cost volatility, which is and has always been a natural market phenomenon.

    "For decades dairy companies have been in charge of managing the milk quota system at their level, including the levying of the super levy payments.

    "It goes without saying that the end of the quota will lower the administrative burden at all levels. This will naturally further enhance the competitiveness of the whole sector," he added.

    EDA stressed the favourable prospects for dairy in the medium and long term, echoing the Commission's statement that "milk is the white gold of the next ten years" thanks to increasing global demand, especially from Asia and Africa.

    Dairy UK chief executive, Dr Judith Bryans, commented: "Although quotas may have been considered as an appropriate response at the time of their introduction, they also held back the development of a truly efficient and competitive European dairy industry over the last 30 years.

    "However, it is now time for the European industry to play a greater role in the global market."

    #2
    How about branding the milk to the farm and making farmer direct sales to consumers and stores. Im pretty sure they could learn a lot from their beer system. No sarcasm.
    I just had a Newcastle Brown last night and my english brother in law loosely described how beers are associated to regions and sometimetimes narrowed down right to the brewhouse it was created.

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      #3
      I don't see any connection between the CWB and the milk quota system. Supply management is guaranteed to make money for the lucky few to be in the system. The CWB had no such powers.

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        #4
        any of you guys know what a "monopsony" is.

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          #5
          Bluefargo, The quota system in Europe differed from supply management here in that there was no Government regulated price paid for the milk, so there was no guaranteed price or profit. It was merely a means of limiting production to prevent over supply and prices crashing (something farmers on here muse about doing in the grain sector) In the past there were regional milk marketing boards in Europe that acted as a single desk seller of milk.

          The connection between the CWB situation and the ending of milk quotas in Europe is that both give up the strength of a collective marketing system in pursuit of an elusive "free market" solution. The reality is that market power is being transferred from the farmer to the buyer/processor and the individual farmer will pay the price for that. Divide and conquer tactics. In both cases aided and abetted by Governments abdicating their responsibilities to create any kind of level playing field in this "free market."

          Yes, I know what a monopsony is but I fail to see the relevance in this context.

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            #6
            Hope you drunk that Newcy Brown luke warm as it's supposed to be consumed Hobby!
            I'd suggest you look for some Belhaven draft (in the cans with widgets) as it's vastly superior to most of the beer in N America in my opinion and way ahead of Newcastle Brown.

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              #7
              The flip side is that the cartel type activity described is protectionist and inhibits trade by giving domestic or local producers preferred access.
              May be good policy for countries considering actions that would result in trade being cut off, can't think of another good reason.
              Might satisfy those farmers who benefit but comes with a cost to consumers.

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                #8
                So by extension Prairie grain producers should be happy with their current situation and prices as they represent "free" trade and gives your customers fair pricing?
                Happiness is not the impression I get when I read the posts about everyone wanting to quit farming, tired of being exploited by input manufacturers and grain buyers and tired of providing cheap food.

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                  #9
                  Grassfarmer, not sure how the milk quota system is collective marketing. It's more like a Stalin engineered, iron-fisted, throw you in jail if you try to sell milk on your own type of organization. You think grain co's are stealing your money, what's the difference with you buying milk for an artificially high price? Looks like a wide basis to me when it comes to buying milk. I just consider it another tax though, see i'm helping a dairy farmer become wealthy because i pay more for milk than it's worth. Free market has worked in canola for 40 years and it's starting to work for wheat too, despite some nay-sayers.

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                    #10
                    mallee, the grain buying monopsony we just got rid of had the ability to buy as little or as much grain as they wanted. This allowed a sort of collusion with the rail monopolies to under invest in rail capacity for decades, and now we're reaping the results of that lack of investment in capacity.

                    In a supply chain where any link isn't functioning correctly (rail), it's always the weakest players (farmers) that end up losing the most. Instead of blaming the politicians and leaders that allow monopolies to have too much power in the first place, there are those that would have us return to the tyranny of the single desk monopsony as some kind of pseudo-counterbalance to the rail monopoly. Forcing farmers to hold grain back during times of higher rail demand just masked the lack of rail capacity that could have been naturally filled in a more competitive freight market.
                    It’s too bad Canadian governments are so slow at neutering monopolies and monopsonies and realizing that they are destructive to our economy if allowed to operate with impunity.

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                      #11
                      Any of you guys know what "delusional" is? LOL

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                        #12
                        Yep, and did you know that when your pointing your finger at someone, you have three pointing back at yourself? LOL

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                          #13
                          "Delusional" is thinking its a good thing to be charging new dairy farmers ever-increasing $ to buy a piece of paper that allows them to produce milk, and charging ever-increasing $ to consumers to help these farmers buy out the original quota owners. Capitalized future subsidy is quickly becoming the lions share of our Canadian grocery bill when purchasing dairy, chicken.
                          This is totally different from the CWB monopsony that for 70 years was the only buyer that western Canadian wheat farmers could sell to, but were only one of many sellers of wheat in world markets.

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                            #14
                            Dairy Cow Guys = Whiney *******


                            We Out Here Scraping Dollars Together Tryna Make a Nickel Wit No Guaranteed Pay Cheque and These Dairy Cow Guys Think They are Entitled To a Set Rate!!!!!!!!!!


                            Welcome To Reality!!!!!!!!!

                            Comment


                              #15
                              Hilarious - "allowed a sort of collusion with the rail monopolies to under invest in rail capacity for decades, and now we're reaping the results of that lack of investment in capacity."
                              Fact is the CWB was the only entity that had any kind of leverage to extract decent service from the railways - now you miss that but still it's the CWB's fault.

                              If "subsidized" high price chicken is eating up the lions share of your shopping budget I guess you won't be able to afford any of that "free market" beef eh?
                              Don't let the facts get in the way of the ideology!

                              Always the pretence that the CWB was like a grain company that you had to sell to when in fact it was pure and simply a marketing organisation working on behalf of farmers. Finding markets, organising the logistics of the sales and shipping to market and paying the farmer the proceeds of those sales minus the costs of operating. If you can't acknowledge that it isn't worth having the conversation.

                              Delusional is thinking that individual farmers because they now have the internet and a smart phone can somehow deal on a level playing field with the Cargills and ADMs of the world once the only marketing power they had has been thrown away.

                              Same story as the milk changes in Europe - at least there the farmers are a bit more alert to the danger.





                              This is totally different from the CWB monopsony that for 70 years was the only buyer that western Canadian wheat farmers could sell to, but were only one of many se

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