Milking the poor - ActionAid International

5024004516 Milking the poor - How EU subsidies hurt dairy producers in Bangladesh 17 Milking the poor - How EU subsidies hurt dairy producers in BangladeshEUR / 100 kg milk ECM403530252015Quota costs10Opportunity costsCost P&L - non milk returns5Milk priceBDT / 100 kg milk ECM2200200018001600140012001000800600400200Opportunity costsCost P&L - non milk returnsMilk price0Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 090Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 0930Income from dairy farming1141400Income from dairy farming251200201000EUR / 100 kg milk ECM15105BDT / 100 kg milk ECM8006004000-5Decoupled payments f. govermentDairy farm incomeDairy farm income + decoupled paymentsFamily living requirements*Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 092000Dairy farm incomeFamily living requirements*Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 09260Index: Dairy income vs. Family living needs260Index: Dairy income vs. Family living needsIndex family living requirements = 100240220200180160140120100806040200Indeed, as the UN Special Rapporteur on the220Right to Food, Olivier de Schutter, has recently 200noted, “Without these various forms of support, 180the EU producers would not be in a position to 160compete on world markets, since the social and 140environmental conditions under which they operatewould not allow them to be competitive”.120111Currently, many European dairy farmers are in-6curringlosses. In December 2010, for example,40the UK National Farmers’ Union claimed there20was a gap between the price paid for milk and0the costs of producing it of some £ 330 million(€ 389.4 million), with British farmers losing anaverage of 3 pence (€ 0.35) 112 , on every litre ofmilk they produced. This poor financial situationis attributed to ”the huge increase in feed andbedding costs” and the absence of a ”fair” milkprice. 113Dairy farm income + decoupled paymentsFamily living requirements*Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 09The graph above covering a three-and-a-halfyear period show that only for a few shortmonths did the EU dairy farmers receive anincome above their living requirements withoutneed for a subsidy. For the rest of the time,farmers’ incomes were only above living requirementsthanks to decoupled subsidies. Thisclearly shows that the EU farmers are for themost part selling below production costs.During Dairy the farm melamine income scandal, when consumptionof imported milkpowder was low, farmers inFamily living requirements*Bangladesh had an income well above living requirements.At other times the price was aroundthe same level as living requirementsor even below.Method assumptionsCalculations done based on the farm economics figures for calender year 2008. To show monthly farm economics for 2006-6/2009 the milk price have been changed proportionally to national milk prices2006-6/2009. Purchase feed costs have been changed proportionally to national feed prices 2006-6/2009. All other cost and returns have been adjusted by inflation.* Familiy living requirments: Share of dairy farm income on household income multiplied with basic family living requirements. Example: DE-31: 90% * 33000 Euro/year), Bd-2: 16%* 50.000 BDT/year)Index family living requirements = 10024010080Jan. 06Feb. 06Mrz. 06Apr. 06Mai. 06Jun. 06Jul. 06Aug. 06Sep. 06Okt. 06Nov. 06Dez. 06Jan. 07Feb. 07Mrz. 07Apr. 07Mai. 07Jun. 07Jul. 07Aug. 07Sep. 07Okt. 07Nov. 07Dez. 07Jan. 08Feb. 08Mrz. 08Apr. 08Mai. 08Jun. 08Jul. 08Aug. 08Sep. 08Okt. 08Nov. 08Dez. 08Jan. 09Feb. 09Mrz. 09Apr. 09Mai. 09Jun. 09According to Agritrade, it is precisely the EU’sdirect aid payments – which currently amount to3.4 euro cents per litre of milk produced - which11