European farmers hurting too

Guy, who attended the OECD agriculture ministers meeting in Paris this month, told Dairy News that EU farmers -- who get subsidies -- have the same cost of production and are paid about the same for their milk as New Zealand farmers.

"That goes to show that even with subsidies their farmers are still feeling pain. Some EU countries have now asked their farmers to voluntarily reduce supply because in the last 12 months production in the EU has grown by 2%.

"I told the ministers' forum that subsidies aren't sustainable in the long term and pointed out that when subsidies came off in NZ we had to innovate and adapt.... So it's not just NZ that's feeling the pain of global dairy prices, its right across the world."

Guy says he spent a day with the French Minister of Agriculture Stéphane Le Foll and went down to his electorate to see a farmers' market.

"I also went to Berlin where I had a couple of fascinating days visiting a dairy farm and milking a couple of cows. I later met with representatives of farming organisations from Germany, Ireland, Poland and other countries. We talked about the global milk price issue and it's clear this is very complicated. The EU countries talked about the Russian ban and the strong milk producing countries like Ireland and the Netherlands that are producing more milk."

Also compounding the problem, says Guy, is that low oil prices have reduced the buying power of some of the oil states. Last week he visited China to try to better understand what is happening there to supply and demand.

Guy says the OECD meeting was concerned with how farmers can feed a fast-growing population while also living with restrictions on farming. Climate change is a related issue, he says.