Luexembourg, June 22 - Europe's farm chief called on retailers on Monday to come clean about the prices they charge consumers for fresh milk, saying recent falls in farmgate prices should have been passed onto the supermarket shelves.
Average EU consumer prices for milk had jumped by around 17 percent in the 12 months up to summer 2008, then fallen back since then by just 2 percent, EU Agriculture Commissioner Mariann Fischer Boel said after a meeting of EU farm ministers.
During that time, producer prices for milk have halved.
"Farmgate prices have dropped to a level below summer 2007, when the increases started. You should have a steeper drop in consumer prices than just two percent," she said.
"If they (retailers) don't find a solution, the ultimate worse-case scenario would be that farmers would stop produding. We would face a horror scenario that we ... would not be able to produce fresh milk for consumers and we would be importing."
Late last year, EU regulators pledged to crack down on anti-competitive practices in the food retail sector to smooth out wrinkles in the supply chain. They warned of a risk that food retail consolidation might be against consumer interests.
In the past, Fischer Boel has complained that retailers tended to make consumers pay dearly for staple foods like bread and milk when world grain and dairy prices were high but were slow to pass on savings when markets retreated.
Earlier on Monday, hundreds of tractors driven by farmers angry about low milk prices snarled up roads around central Luxembourg on Monday, causing lengthy motorway delays at the start of the EU ministers' monthly meeting.
Just days after a similar demonstration in Brussels during a summit of EU leaders, the sheer numbers of tractors from at least five countries caused motorway tailbacks of up to 40 km (25 miles) towards and over the Belgian border.
France, Austria and Germany in particular say their dairy producers have been badly hit by weaker prices and want firm EU action to bolster farmer incomes. They have tabled a series of requests, mostly involving hikes in aid to the dairy sector.
"It's important to have a transparent system so we can see where the added value is disappearing. A code of conduct has also been mentioned," Fischer Boel said, without elaborating.
"I'm just asking the question where the money is going."