EU order study of milk market

June 19, 2009

, BRUSSELS, Jun 19 –  European Union leaders are set to order a study into ways to help halt falling milk prices, after hundreds of farmers with tractors camped near their summit meeting in Brussels.

In a draft statement, the leaders "invited the (European) commission to present an in-depth market analysis within the next two months, including possible options for stabilising the dairy market."

A few hundred metres from the European Council headquarters in Brussels, the farmers left a makeshift camp in a park with their tractors early Friday to join the peak hour traffic.

On Thursday, as the summit got underway, traffic around the Belgian capital\’s European quarter was in chaos, as the protesting farmers — from Belgium, France, Germany and Switzerland — left burning tyres on a main road.

Hundreds of police erected barriers to stop them approaching the building where the 27 European heads of state and government were meeting.

Farmers accuse retailers of exploitation, complaining that the price they are paid for milk by wholesalers has fallen dramatically, while the cost to consumers in supermarkets has remained stable.

They have been holding protests for months in search of some price support through financial aid or by limiting supplies.

The European Commission, the EU\’s executive body, has so far announced very targeted aid to the sector but has refused to go back on its decision to scrap milk quotas.

Last November, the bloc\’s farm ministers agreed to lift milk production quotas by one percent per year before scrapping them altogether in 2014-2015.

Quotas were introduced in 1984 to support prices and tackle the then notorious butter mountains and milk lakes in Europe created by overproduction.

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