The agricultural sector in Germany is currently engaged in a contentious debate over the implementation of Article 148 of the Common Market Organization (CMO) at the national level.
The proposal to implement Article 148 has faced criticism from industry associations such as the German Farmers' Association (DBV) and the German Raiffeisen Association (DRV).
DBV Vice President Dr. Holger Hennies, who is also a member of the Commission for the Future of Agriculture (ZKL), has emphasized that the commission had explicitly ruled out the national application of Article 148.
Concerns have been raised that the national application of Article 148 could lead to a decline in producer prices and not strengthen the position of milk producers.
DBV Milk President Karsten Schmal has echoed these concerns, warning about the potential detrimental effects on the milk market.
The DRV's Managing Director, Jörg Migende, has highlighted a study from the ife Institute for Nutrition and Food Economics Kiel, which suggests that the national implementation of Article 148 would weaken the entire milk value chain, particularly impacting producers.
Migende argues that national regulations governing supply relationships between milk producers and dairies are unlikely to positively influence milk prices in the long term and could disadvantage domestic producers.
In contrast to the criticisms from DBV and DRV, the German Dairy Farmers' Association (BDM) supports Özdemir's initiative, seeing it as a necessary step towards a more market-oriented approach in the dairy sector.
BDM Chairman Karsten Hansen believes that the national implementation of Article 148 could enhance the market position of milk producers against buyers.
The BDM notes that the ZKL members unanimously supported making contractual agreements binding prior to the delivery of agricultural products.
This is seen as a necessary step to provide producers with greater certainty regarding their financial returns.
The Arbeitsgemeinschaft bäuerliche Landwirtschaft (AbL) agrees with this sentiment, describing the draft regulation as a trend-setting start for establishing the political framework needed to support farmers.
The Federal Ministry of Agriculture has submitted a draft regulation for the national application of Article 148 for consultation with federal states and industry associations.
Özdemir has emphasized the importance of binding supply contracts that detail quantity, quality, price, and duration while respecting the autonomy of cooperatives.
The agricultural community remains divided on the potential impacts of these proposed changes.
Some see the initiative as a necessary evolution towards a more structured and predictable market environment, while others fear it could exacerbate vulnerabilities within the milk production sector.
The outcome of this initiative could have far-reaching implications for milk producers and the broader agricultural economy in Germany.
The government will need to carefully consider the balance between regulatory intervention and market autonomy in fostering a sustainable agricultural sector.