In the build-up to the phosphate reduction plan for the dairy sector, the Members’ Council also agreed with a temporary standstill measure in the Netherlands on the basis of exceptional circumstances.
With this measure, FrieslandCampina wants to stimulate its member dairy farmers to timely start working towards the target of the dairy sector plan. Besides, this measure helps keeping the milk supply and the available processing capacity in balance. The temporary standstill measure will come into force on 9 January 2017.
Approval of sector plan
The Members’ Council has accepted the proposal of the Board of Zuivelcoöperatie FrieslandCampina U.A. to support the sector measures. The effective establishment of the measures will depend on the final decision within the sector and the approval of the European Commission to render the sector measures universally binding for the entire sector.
Temporary FrieslandCampina standstill measure
The Members’ Council also agreed with a temporary standstill measure to stimulate member dairy farmers to timely start reducing the phosphate production. In its capacity plan for 2017 FrieslandCampina reckoned with the coming into force of the phosphate rights system as of 1 January 2017 which was however postponed until 1 January 2018.
A member dairy farm will be cut back for exceeding the pre-established reference volume. This deduction will amount to 90 per cent of the monthly guaranteed price over the amount of milk supplied in excess of the reference volume. When a dairy farm remains below the monthly reference volume, it will receive a premium for the amount of milk supplied below the reference volume. The premiums are financed from the deductions.
The dairy farmers can in advance themselves choose from three reference periods for establishing the reference volume: (I) 20 August 2016 up to and including 17 September 2016; (II) 1 January 2016 up to and including 31 March 2016; (III) 13 November 2016 up to and including 12 December 2016.
The temporary FrieslandCampina standstill measure will be put into force on 9 January 2017 and continues until the moment the phosphate reduction plan for the dairy sector will come into force. The measure may be adjusted, depending on developments.