School milk subsidy not enough for struggling dairy farmers

The reinstatement of a school milk program will bring thousands of pints of milk to schools beginning this fall in an effort to promote milk as a healthy drink choice for children, but the program is not enough to help the ailing dairy industry, according to industry insiders.

As of Sept. 1, the Czech government will award 60 million Kč ($3.3 million) to select dairies to supply milk for school lunches at nearly 2,600 schools throughout the Czech Republic. The state funds join the 20 million Kč already supplied by the EU for the program. By reinstituting subsidies for milk in schools, the Czech Republic rejoins 20 EU member states participating in the European School Milk Scheme, having discontinued funding the program in August 2008.

As milk prices reach all-time lows throughout Europe and dairy farmers begin to step up the level of debate and protests, such as June 29's road block by 2,000 Czech dairy farmers in seven regions throughout the country, the School Milk Scheme ostensibly offers aid to the dairy industry and represents the government's renewed commitment to dairy farmers. Whatever the program's fringe benefits, however, it was designed to promote health, not to influence the plight of dairy farmers, said Petr Vorlíček, spokesman for the Agriculture Ministry.

"[The program] is aimed at the promotion of milk products, spreading information about a good diet and education of school children [about] healthy eating habits," he said.

Under the new program, students at participating schools will be able to purchase milk for a third of the current market price. Producers who prove they are distributing their milk to schools will be eligible to receive funds from the state or from the EU. According to Michal Němec of the Czech Association of Dairy Farmers, the School Milk Scheme is a step in the direction of aiding dairy farmers, but a step too small.

"The milk in schools is a marginal market," he said. "But the program is a way to make use of milk. It is also a way to look after our future, because children will get used to drinking milk in the program."

In August, the Finance Ministry will publish a list of milk products and producers that will be included in the program, as well as the maximum prices of products included in the plan. It is likely that Madeta, the country's largest milk producer, which processes milk from hundreds of dairy farmers, will receive a significant portion of the benefits. Barbora Daňková, a spokeswoman for Madeta, said the School Milk Scheme will have a positive effect on the dairy market during an extremely difficult time.

"The idea is that, if you put more and more money into the dairy industry, you don't know if you'll get it back. But the situation is so bad that we've got to do something," she said. "The state of the dairy market is worse than ever, and I think it will get even worse."

The price of milk in the Czech Republic has fallen rapidly in the past year, from 9 Kč per liter in 2008 to 6 Kč per liter in early 2009. According to the Agrarian Chamber, the low cost of milk has meant 4.5 billion Kč in losses for dairy farmers in the first half of 2009 alone. The Chamber has charged both the Agriculture Ministry and the EU with not defending dairy farmers' rights, and has asked for a minimum milk price to be set by the Czech government, which has yet to comply. The Chamber's requests have been echoed throughout the EU, with demonstrations taking place in Brussels throughout June and July.

In a statement released June 20, European Commissioner Mariann Fischer Boel called for far-reaching stimulus measures on the European dairy market, which has been hurt in recent months, first by overproduction and, more recently, by the global economic crisis.

Němec agreed, saying, "Not only in the Czech Republic, but worldwide, I can say that no one is satisfied with the price of milk. The prices are so low that milk producers can't even cover their own costs."

Stephan Delbos can be reached at
sdelbos@praguepost.com