A Heart for Producers

Last week I had to try hard to keep from laughing. I was shopping for grocery and saw a new campaign: Ein Herz für Erzeuger (A Heart for Producers). The idea: Rather than spending 49 cents on a liter of milk you pay 59 cents and the additional 10 cents go completely to the farmer. This is ridiculous in many ways!

In Germany there is both a charity campaign Ein Herz für Kinder (A Heart for Children) for needy children and a magazine Ein Herz für Tiere (A Heart for Animals respectively Pets). And now needy farmers? So first it's simply a ridiculous name from a marketing perspective - or am I the only one who thinks first of a donation account when hearing this campaign name?

Second, why should I pay more for the same product? For my good nature or my conscience? I'm sorry, but this is the same milk from the same intensive livestock farming where cattle is fed with the same antibiotics! Isn't it understandable I don't feel sympathy for this kind of farming? If I want to have a better product for which I'm willing to pay more I'll get organic milk.

Third, I'm not denying that many farmers, especially small businesses, have major problems with the low milk price and their costs. But the problem is far more complex (German) - and needs painful consequences. For years the market for milk was totally regulated (just like every other agricultural product in the EU) by setting quota how much a farm can produce. This led to the infamous so-called milk seas or butter hills - products produced beyond the market's needs, bought with huge subsidies by the EU and destroyed or fed to livestock.

Now the quota system is going to be removed - and the market will fix the distortions caused by the regulations: The price will likely drop due to the oversupply. Some farms might switch to the production of organic food which gives them higher income per unit (a liter of organic milk costs 89 cents). But there will definitely be individual fates, especially small farms, that will have to shut due to reduced income. But it is not possible to work against the market or it will cost an enormous amount of money. It makes more sense economically to spent the money otherwise despite the costs for social benefits or other support for the victims of this change. Only one thing is sure: The 10 cents can't prevent that change. If at all it will extend the agony.