Lyon makes speech at major European dairy conference

2.31.17pm BST (GMT +0100) Mon 14th Jun 2010

George Lyon, Liberal Democrat MEP for Scotland, has made a major speech to the EUCOLAIT Conference in Lithuania warning against any re-regulation of the market place in an effort to control supply and prices in the market place.

EUCOLAIT is the foremost representative association of European dairy trade. It is recognised by EU institutions as the representative organisation of European dairy trade and has a membership of over 850 companies across Europe.

Mr Lyon told the Conference:

"For many the top priority for CAP reform is price volatility.

"Yet EU grain, milk and beef prices over the last 15 years have been relatively stable apart the huge price rise and subsequent fall during 2007 and 2008.

"What caused that one off boom and bust?

"Agricultural prices were caught up and driven by the huge speculative bubble that gripped all commodity markets, they were fuelled by casino banks' reckless lending spree and they fell due to the bubble bursting causing the worst financial crisis and deepest recession since the 1930s.

"Are we really saying that we should be redesigning a future CAP based on a once in a life time set of economic circumstances.

"I do not think so.

"Yes, action needs to be taken to stop a debt fuelled speculative bubble from happening again but this should be done by better regulating the financial markets and not through CAP.

"And yes, we need some key instruments - intervention, private storage aid and, most importantly, flexibility for the Commission to act quickly in times of real crisis.

"And farmers need to learn to use new financial tools to insure themselves against risk.

"But it would be utter folly to try and design new ways of rigging the markets and inventing new tools to control supply and prices permanently as some seem to be suggesting.

"We have been down this road before and it does not work. The danger is that in times of crisis theses new tools would erect barriers around Member States' markets and disrupt access to them.

"The focus of CAP reform should not be on re-regulation of the market place.

"The absolute priority has to be tackling the so called 'perfect storm' of growing worldwide demand for food against a backdrop of water and energy scarcity and potential food scarcity.

"In my report I set out how a fairer greener and more sustainable CAP can provide answers to these key questions demonstrating clearly that farmers and agriculture are part of the solution to the 21st century problems and not part of the past as some would like to suggest."