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EU dairy industry says reform delay threatens jobs

BRUSSELS: Europe's dairy industry on Wednesday described the farm reform deal brokered by EU leaders in Berlin last week as disappointing, saying it put jobs and incomes at risk in a sector that employs a million people.

European Union leaders, under pressure from French President Jacques Chirac, agreed to delay planned changes to the EU's milk regime -- cutting support prices by 15 percent and increasing national production quotas by 1.5 percent -- until 2005.

"A large majority of EDA (European Dairy Association) members is disappointed by the further postponement of decisions in the dairy sector," the EDA said in a statement.

It said it agreed with the European Commission's original proposals which called for reform to kick in from 2000 in order to ready the bloc for its planned enlargement eastwards and the next world trade round.

"By postponing relevant changes in EU dairy policies to 2005/2006, the dairy industry will not be prepared for any of these important issues, thus exposing this important sector that employs both directly and indirectly a million people," it said.

"And with no change in the EU regime, further pressure from the WTO (World Trade Organisation) has to be expected."

The Brussels-based EDA said failure to undertake reform in the near term also left open the possibility that internal dairy aid programmes and export refunds could be pruned further in the next few years as the EU seeks extra budget savings.

"If these support measures and budgets are not maintained, this will cause increasing pressure on the dairy industry, endangering growth and employment, and/or will put further pressure on milk prices, and as such impact farmers' income."-Reuters