Milk currently represents 60% of the income of family farming/agriculture

Congresspeople and organizations related to the dairy sector will submit to the Ministry of Finance and Planning a set of measures to reverse the drop in the price of milk paid to producers in recent months, described as "plummeting" by the chairman of the Confederation of Brazilian Cooperatives and Dairy Producers, Paulo Roberto Bernardes.

Representatives of the government and producers participated on Tuesday, November 4, in a public hearing on the subject, organized by the Committee for Agriculture, Livestock, Rural Development and Supply.

The crisis
The Brazilian cooperatives had been exporting around 20 million dollars per month in milk and other dairy products; because of the crisis, there was a reduction of 70% in this amount. The main importer, Venezuela, suspended their purchases, since it was affected by the devaluation of its main export product – oil.

Milk currently represents 60% of the income of family farming/agriculture, and the government seeks to protect this social sector through a policy of price guarantee. “When the price of the product falls below a benchmark set by the government, the later supplies the difference to the family farmer”, explained the Director of Income Generation of the Secretariat for Family Farming of the Ministry of Agrarian Development, Arnoldo Campos.

For the coordinator of Permanent Crops and Livestock of Ministry of Agriculture, João Antônio Fagundes Solomon, the surplus stock of Brazilian milk is very high - 1.4 billion liters, which, he says, has been causing the price drop of the product.

Motions
The committee decided to schedule a meeting with the Minister of Finance, Guido Mantega, to discuss a solution to the crisis. The suggestion was made by Deputy Adam Pretto (PT-RS), and received support from all members of the committee.

Deputy Moacir Micheletto (PMDB-PR), though, informed, during the hearing, that the Parliamentary Front of Agriculture will also discuss measures to face the crisis in the dairy industry with the Minister of Planning, Paulo Bernardo.

Deputy Leonardo Vilela (PSDB-GO) wants to discuss with the minister a tax reduction on the inputs of milk production. Deputy Adam Pretto proposes that the National Supply Company (Conab), linked to the Ministry of Agriculture, buy part of the milk surplus in the market to use it in school snacks and include it in the basic food basket. He argues that the Conab has already been buying products such as wine and honey.

John Anthony Solomon explained that the Ministry of Agriculture envisages two kinds of solution: the assembling of a system that should be financially supported by the government, and whose purpose is to drain the surplus to poor regions, and to strengthen the storage system, with the expansion of the limit from R$ 10 million to R$ 15 million for each loan corporation to finance stock shipments.

The Chairman of the Confederation of Brazilian Cooperatives and Dairy Producers, Paulo Roberto Bernardes, proposes that the government allow private contracts for milk option and sales, similar to those closed with other products; the expansion of government purchases, and also additional R$ 300 million for loans to the dairy industry. "The industry is discouraged, and as a result the breeders are going to the slaughter," lamented Bernardes. He also warned that, after becoming a major milk exporting country since 2003, Brazil may be obliged to import the product again.

For producers, it is a structural problem
The Secretary of Agricultural Policy of the Workers Confederation in Agriculture (Contag), Antoninho Rovaris, said that the problem of this sector is not only related to management, but to structure. According to Rovaris, in the last two years, large foreign companies entered the Brazilian market. These companies buy milk from the producer at tiered prices, according to their scale of production. "More milk, higher prices, less milk, lower prices. The result was the flattening of the minimum prices paid to small producers.

The representative of Via Campesina, Dário Fernando de Mello, proposed a regulating policy to production chain of milk, based in the minimum price rather than in the average price. For Via Campesina, (an organization that brings together a range of social movements related to settlements of small farmers and agrarian reform) the current international economic crisis shows that the market has no capacity for self-regulation, and therefore, the presence of the State is critical in ensuring public interest.

Mello defended the adoption of measures to enable small producers to collectively sell the milk, achieving scale and getting better prices.

Report - Luiz Claudio Pinheiro
Editing - Paulo Cesar Santos / Rejane Xavier