PORTUGUESE COMMUNIST PARTY

Parliamentary Group

Draft Resolution No 505 /X/4.

It recommends the Government to adopt measures of

IMMEDIATE SUPPORT FOR THE PRODUCTION OF NATIONAL MILK

At risk of liquidation the dairy farms of the Country

1. An unsustainable situation

The conjugation of the low price of milk paid to the producers with the rising costs of

production makes it unsustainable the survival of thousands of dedicated livestock farms

to the production of milk. What will determine a new 'forced' restructuring of the sector

productive, after the "expulsion" carried out in the last two decades, which translated by the

passage in 12 years from more than 80 thousand dairy farms to about 11 thousand, half of the

which has less than 50 cows. The measures taken recent and tardily by the Government (and

by the European Union) are far from responding to the seriousness of the situation, most looking like

want to take advantage of the crisis, to realize that new restructuring, with the elimination of the

milk production of more than a few thousand producers and some regions of the Country, as

Rear-the-Montes, Beira Interior and Alentejo. The blackmail made on the producers of these

last regions (Planalto Mirander, District of the Guard), by national and Spanish companies,

with the threat and, in some cases, the delivery of the non-collection of milk, translates into

ruin prices for production (below 25 cents) and the practice extinction, short term,

of the activity!

2. The low price of milk is particularly linked to the import of milk from countries of the

European Union at balance prices

Many are the arguments thrown out to justify the low price of milk, in general to

absolve decisions and behaviours of economic and political actors with paper

determinant in the row, and main responsible for the problems referred to. There's even who if

dare to say that it is to defend Portuguese consumers! The Government, through the

Minister of Agriculture, always begins by denying the problem to justify his

inactivity and, fundamentally, to hide its responsibilities in the approval of

a suicidal community policy for the production of national milk. But when the shops of

a large distribution group (SONAE) start to sell the milk package (UHT/half

fat), imported from Germany, at 39 cents everything becomes clear. Because of the two, one. Or the

milk is sold below its final cost (cost of production, packaging and transport), without

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commercial margin and with injury to the trader, which is prohibited and punishy by the rules

of the competition, or is purchased in that country below the local costs of production, at the price of

balance, probably with state supports, and we are in the face of a dumping process,

prohibited in the European Union. How is it possible that milk coming from Germany could be sold

in Portugal, to the consumer, at prices that are insufficient to compensate for production

national, which complains a minimum of 40 cents / litre?! It is criminal that a Country with a

external deficit above 10% and an external indebtedness that rounds off the 100% of GDP,

continue to import millions (250 million? ??) of litres of milk from Europe (Germany, France,

Poland, Spain) while there are in stock millions of litres (there are months existed 60

million) of national production!

3. The settlement of dairy quotas and the liberalisation of the dairy market

This situation is on the basis of a structural issue: consolidation in the European Union in the

last years, under the thrust of the Northern countries, major producers and exporters of milk

(Denmark, Netherlands, Ireland, United Kingdom and others), of the purpose of revision of the Organization

Common of the Leite Market with the settlement of the system of dairy quotas. Purpose to

that no Portuguese Government has objected radical and frontally, including by invoking the

vital interests of the Country. Path made, as always, from small steps, "facilitating" the

cedances and the justifications of governments such as the Portuguese. Path started in 1999, in the

scope of the reform of the CAP (Agenda 2000), which had the agreement of the then Government PS/Guterres

(was Minister of Agriculture Capoulas Santos, and had as an aide in Brussels the current

Minister Jaime Silva), where he set the end of the quotas for 2008. What was changed in

2003, postponing the death sentence to 2015. Path that was restarted in 2008 (Council

of Ministers of Agriculture of March 17), likewise with the agreement of the present Government and of the

Minister of Agriculture (Germany and Austria voted against it and France abstained), accepting

an increase of 2% overall and equal for all Member States-which meant producing

plus 2.8 million litres of milk in Europe in campaign 2008 (01Abril) / 2009 (31Março). What

had the well-known epilogue at the Council of Agriculture Ministers of November 20

past (consolidated result in the Council of Ministers of 18/20 December) with the

acceptance of the settlement of the quota to be provided, through an annual increase of 1% to

all countries (for Italy the increase was in a one-time provision of 5%), " in order to prepare the

his disappearance, scheduled for 2015 " (from the Communiqué of the Council of Ministers). Shape

of ending quotas by ensuring a so-called "soft landing", because it would do without "pain"

of the producers, who would go "habituating", preparing their final settlement by uselessness

in 2015! What happened was that the latest measures of quota increases "have legalized"

the surpluses, which some of these countries were producing for there from quotas, and which now

appear in the European market at balance prices. Someone believes that Europe, like

want some, because of the crisis, reduced their milk consumes in nature and dairy products

in such a way as to provoke the surpluses that now appear on the market? The result of the

settlement of the milk quotas will be the end of dairy production, not just as it comes

happening in so-called marginal, non-efficient zones and explorations, but in countries such as

Portugal, even in the dairy basins of the Entre Douro and Minho and Beira Litoral, which never

will be able to compete with the dairy areas of Northern Europe, or worse, on the market

worldwide, with the holdings of thousands of cows from the USA, New Zealand or Australia.

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Without referring here and now the decisions, never explained, of the Government in lowering the rate of VAT

(reduced rate of 5%) for some imported dairy products and soybean substitutes in the Budget

of the State for 2008, the conjuncture experienced in the sector results, then, in the essentials of power

dominant that large distribution groups have acquired in Europe and Portugal, and of the

processes of complete liberalisation of agri-food markets which, in the wake of the

successive negotiations of the World Trade Organization (WTO), the European Union will

approving. Guidelines that have presided over the negotiations and reforms of the Joint Organizations

of Market (CMO) of milk, such as wine and other agricultural products. On the other hand, the

impositions and demands of the great distribution in its relations with the dairy industry

(differentiated margins as it is about their brands, white brands, or brands

of the manufacturers, clausulado leonino in supply contracts, systematic practices of

guaranteed margins, management of spaces and categories, payment deadlines, etc., etc.),

narrow or eliminate even the margins of the manufacturer, which then makes repertoire such a fact

on the first link of the value chain: the producer!

4. The rise in production costs

It is also clear that the problem of the unbearable low yield of the activity of the

dairy farms, and of other agri-farming productions, is not only the result of the low

of the price of milk, but of the conjugation of that fact with the brutal rise in costs of the

main factors of production (diesel, rations, fertilisers, electricity) verified in the 1.

semester of 2008, accompanying the galloping of oil prices. Prices that if

have essentially maintained in the 2 th semester and that they have prolonged in 2009, despite the

some declines. And when some, among them the Government, value the prices paid to the

production in Portugal, relatively abroad, always forget this other face of the

currency, which are the generally lower prices to which the farmers in these countries

pay for the factors of production (and other costs such as Social Security), in general

strongly supported by their states.

It also forgets the Government the effect of some of its decisions, such as the elimination of the

green electricity (which aimed exactly to bring the cost of that energy factor into

Portugal to those of other countries), or the practice settlement of agro-environmental measures, which

were helping to balance some farms, or the absence of measures, not only claimed

as possible in the face of European legislation, such as the withdrawal of surplus calves and cows from

refugo, in a framework of rising rations, and with the market for beef under pressure,

also by imports made from Europe and, particularly, from Latin America.

Without capacity, or will, to carry out a permitting process of the

livestock farms that combine the defence of environmental standards with the safeguard of

actual structure of the Portuguese agri holdings, not transforming the process of

treatment of effluents in a new blow in the already fragile financial balances of the

explorations, the Government has wrapped up in a complex and bureaucratic legislative production of

framing, not yet complete, already revised and amended more than once, but without ever

take the appropriate public funding of the process, as a key issue. On the way to

Five years of Government, and the problem is worse that at square one: it created distrust and

animated in many the will to get out as soon as possible from production.

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Particularly serious in this context, is the complete paralysis of the Competition Authority

(AdC) which, despite alerted to the situation, continues without any relevant action from

approach to a market where it is manifested the gross violation of the rules that legally

it will be up to you Add also that, on the issues of competition, the

Ministry of Agriculture once again stood for platonic statements, at the exit of a

European Council-"it is up to the AdC to keep" attentive " to the situation in the sector, as the price of the

litre of milk in the consumer does not reflect the cost-verified declines at the level of the

production "!

5. A disintegrated view of the milk and dairy row

The milk and dairy row has no answer in a disintegrated view of the remaining

agrolivestock activities, and particularly of the beef market. The inability

to look at the reality of Portuguese farms, notably from agriculture

familiar yet dominant, leads to unsettling measures, unable to potentiate and enjoy

up to, the means that are sometimes made available. For what a lot also contributes a

policy of permanent affronting of agricultural confederations which, not being the ones

Government would wish, are the ones that exist! It is what succeeding with the tutelage process,

framing and technical-sanitary support for livestock farms that, having started poorly

there are many governments ago, continues without the necessary and sufficient response, overloading

the producers of standards, costs and fines, by fragmenting the weak edifice of animal health and,

indirectly, putting into question public health rules. That is what is happening with the

dismantling of the services of the Ministry of Agriculture, via PRACE and EMS (Situation of

Special Mobility), sidelining them from farmers and incapacitating them to intervene, making

even more time-consuming the processes.

The solution to structural and, particularly, conjunctural problems of the milk row and

dairy products will not pass through forcing the exit of a few thousand more producers, through a

any quota ransom, eliminating small or medium family farms

size or farmers of high age levels, or still production in so-called areas

"marginal". On the contrary, the central issue is to create conditions for the current

producers to stay in business, even if with their "refreshment" by young people

farmers who have been instilted in the row. What does not mean the absence of mechanisms

suitable that can support the change of activity of the agricultural holding. But the

essential direction of policy should be to encourage the maintenance of the activity in the row,

saved exceptional situations.

The definition of a dairy policy, taking aim at the search for viable exploitation,

efficient or competitive by eliminating the smallest / lowest number of cows, as it has

happened in the last few years, is to pursue an unreachable goal, error of a strategy that

will end up discovering that so-called "viable" holdings are located only in the countries of the

North of Europe, in the USA, New Zealand or USA! The proper strategy can only have as

objective to ensure, in a framework of sustainability and productive diversity, with how much

baste of specialization (in the face of a small country and relative soils ' exiguity

agricultural), the maximum of agro-food production, in the whole of the national territory, targeting the

security and food sovereignty.

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Thus, under Article 4 (1) (b) of the Rules of the Assembly of the Republic,

the undersigned Deputies of the Parliamentary Group of the CFP propose that the Assembly of the

Republic recommends to the Government, pursuant to Article 166 (5) of the Constitution of the

Portuguese Republic, to adopt the following measures:

1. Immediate Measures that would crash the degradation of producers ' incomes

(i) institute, in the framework of the minimis aid, a compensation up to 5 cents per litre for the

family farms family up to 100 cows in production, and while it last the present

low prices;

(ii) to repose the green electricity for all livestock holdings and to ensure, equally,

differential and higher support for green diesel, never less than 5%;

(iii) suspension for the period of 6 months of social security contributions, to

similarity of what was done in 2008 to the fisheries sector, with the due transfer of the

Budget of the State for Social Security of the necessary monies;

(iv) triggering an intervention plan supported for withdrawal of newborn calves and

cows of refuges;

(v) propose to the AdC to urgently trigger a mechanism for monitoring prices

of inputs, such as rations, pesticides and fertilizers;

(vi) to create, in the framework of the agro-environmental measures, an aid to the collection and concentration of

milk in mountainous and disadvantaged areas;

(vii) negotiate and ensure with the companies of the domestic industry the guarantee of runoff,

under acceptable conditions, of the milk today produced in these areas;

(viii) enlargement of the new agro-environmental measure, announced by the Government for sheep and

goats (250 euros / hectare), in mountain regions or at risk of depopulation, for the

production of milk and beef cattle ranching;

(ix) rapid completion of the control processes of livestock farms that are preventing

hundreds of farmers from receiving the RPU aid of 2008, to which they are entitled.

2. urgent sanitation measures of the milk and dairy fillet

(i) quick start of negotiations between production, industry and trade, under the coordination of the

State, aiming at the concertation and the taking of measures, with the aim of stabilizing the

markets, ensure the marketing of appropriate levels of national production, inclusive

of the existing stocks, and reduce the resource to imports;

(ii) immediate triggering of import measures of imported milk and dairy products and

marketed in the Country, aiming to check whether they comply with the hygieno-sanitary and the

competition, required by Portuguese laws and community standards; a particular attention

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should be given to milk and dairy products marketed under the vulgar designation of brands

white;

(iii) requirement that the AdC, in collaboration with the Centre for Agricultural Markets and

of the Agrofood Imports, intervene and urgently analyze commercial practices

of the various actors in the sector;

(iv) in the framework of the legislation in force-Law No. 18/2003 of June 11-approving the scheme

legal tender and, pursuant to Article 27 (Cautiary Measures), complain that the

AdC preemptively orders "the necessary measures to the immediate repose of competition"

and safeguard the interests of national production;

(v) the proposal for the AdC to request counterparts from the European Union for a meeting

for approach to the situation in the European milk and dairy market and possible violations

of the rules of the competition;

(vi) the proposal that the Portuguese government, on the basis of the huge disturbance verified in the

sector, which can definitely sweep away the dairy production of regions and even countries,

request the realization of an Extraordinary Council of Agriculture Ministers for debate and

taking of measures, aiming at the reposition of the milk quota system, the sole form of

ensure that Portugal and other states are going to maintain production;

(vii) monitoring and assessment of the situation of the market for other dairy products and the

beef market, with a view to possible regularizing interventions;

(viii) rapid creation of the normative framework for the voluntary implementation of a

quality label (Label Q), which allows full movability, from the farm to the

industry, and the easy visibility by the consumer of the origin of the product.

3. Measures that repose reasonable levels of economic-financial balance of the

explorations

(i) financial support for the treasury of the holdings, with the creation of a line of credit with

bonified interest at 100%, grace period of one year and a payment term never

less than 5 years;

(ii) long term credit line creation (never less than 20 years) with a rate of

bonification of 50% aiming at the undivided;

(iii) creation of credit line under conditions similar to that in (ii) for investment;

(iv) rapid operationalisation and shortening of deadlines in the processing of aid

intended for the row, within the framework of the ProDeR;

(v) evaluation, elaboration and proposition to the European Union of anticipatory mechanisms and

payment Celere to the producers of supports and aid for income and investment;

(vi) suspension of the current licensing processes of livestock farms and

reconsideration, in dialogue with the associative structures of farmers, of the whole

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legislative framework, aiming at its simplification and adjustment to the reality of the fabric

productive livestock, with the concurrent definition of the supporting and redistribution of costs.

Assembly of the Republic, June 4, 2009

The Deputies,

AUGUSTINE LOPES; JOSÉ SOEIRO; JOÃO OLIVEIRA; HONORIUS NEW; BERNARDINO

SOARES; ANTÓNIO FILIPE; BRUNO DIAS; JORGE MACHADO; MIGUEL TIAGO; FRANCISCO

LOPES