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Solutions?
What can be done? Here are some
possibilities...
Click on each solution to find out more about it.
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In some other
EU countries, dairy farmers are doing better than
they are in the UK. One reason for this is that
the supply chain is shorter. Farmers' co-operatives
sell milk directly to shops and supermarkets. They
also own (or have shares in) milk-processing factories.
The profit which can be made on dairy products is
higher than it is on raw milk, and so the farmers
make more money by processing their own milk. |
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Does John get any help from the EU?
Contrary to what many people think, the European Union does
not give direct financial support to UK dairy farmers. Instead,
it takes steps to keep the milk price stable, by imposing quotas
(limits on the amount of milk each farm is allowed to produce),
in order to prevent any EU country from producing too much milk.
Because more milk is produced in the spring than the autumn,
the EU buys milk at this time of year and stores it as milk
powder. The EU also imposes import
tariffs on foreign
milk, in order to minimise competition from cheap imports.
In spite of the quota system, the EU does produce surplus milk
and, in order to remove it from the marketplace, it sells it
to other countries at low prices.
Supply and demand: Remember that the law of
supply and demand says that the price of a product goes down
as the availability of that product increases. The EU tries
to protect its farmers against low prices by restricting supply.
For more information about the economic issues, read the
issues.
Welcome to Wales
- Meet the family - Visit
the farm - John's day - Problems!
- Solutions? - The future |
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