FrieslandCampina is a dairy co-operative in the Netherlands which also collects milk from some 900 Belgian producers. It has a big factory in the Flemish part of the country. Overproduction is the reason for channelling the Dutch producers’/members’ surplus to this factory.
FrieslandCampina
Now half of the Belgian producers that delivered their milk to this factory have been dumped: in a few weeks they will have to look for another dairy to take their milk. FrieslandCampina Belgium has decided to stop collecting milk from 443 Belgian dairy farmers with effect from 1 July 2016. The official reason for this is to adjust the national milk volume to market demand in Belgium. According to a FrieslandCampina press release, more milk was produced in Belgium in 2015 than can be sold in the country.
The real reason is quite evident for me: Dutch farmers are cooperative members, the Belgians not! The Dutch members are favoured and are allowed to continue to deliver their milk to the detriment of the non-members (in this case the Belgian farmers). For this reason, a part of the farmers now have to look for another dairy. The other part – those who can stay – have the assurance to stay there for only 3 years.
Milcobel
The so-called “competitor” Milcobel has now signed an agreement to take on the milk producers concerned. FrieslandCampina is paying dairy farmers who become Milcobel members as from 1st February 2016 a bonus of three cents a litre of milk based on the milk supplied in 2015. Of this, 2.5 cents go into Milcobel’s member account, and the farmers retain 0.5 cents. Farmers who go to another dairy or who switch to Milcobel after 1st February 2016 or who decide to stop supplying milk from the beginning of July will receive 0.5 cents per litre of milk in compensation. Milcobel also promises to give a bonus to the new members who increase their production later on!
Milcobel, it should be said, pays less than other dairies in the country. So it’s hardly a windfall! But Milcobel is hoping to make its oversized milk powder facilities profitable with this transaction.
Boerenbond
We should not forget that the producer organisation (PO) was ignored throughout this deal: the PO was not informed until the last moment and FrieslandCampina did not give an inch of leeway for amending any minor detail in the agreement with Milcobel. So we have no back-up from the PO for our position. The Belgian Copa-member Boerenbond kept very silent and left the producers alone with their problems as well as during the negotiations with other dairies.
Meanwhile, the cooperative members can go on with their overproduction. The sacking of the non-members can’t go fast enough. The management of FrieslandCampina can’t handle all the overproduction as long as the non-members are not put aside. The ones who have to leave and sign for Milcobel or LDA – the so-called rivals – stop immediately delivering to FrieslandCampina. But it doesn’t go fast enough for the management of Friesland Campina: they even give a bonus to those who manage to deliver a bit less. By 1st February this problem for the management should be solved (i.e. the Belgians thrown out) and then overproduction can continue at a great pace!
Rik De Coninck, FMBBelgium: overproduction results in losses
