German Minister of Food and Agriculture Christian Schmidt met on Monday with representatives from the dairy industry and retailers in Berlin at a "milk summit" aimed at resolving the problems caused by a radical fall in milk prices.

Schmidt announced after the meeting that German dairy farmers would receive at least 100 million euros ($111.37 million) in immediate loans, guarantees and tax relief to help them weather any financial shortpasses.

He said he would be holding discussions about the exact sum.

Ahead of the summit, Schmidt said he also wanted to cut milk production to stabilize the market.

"We need less milk at a better price," he told the daily "Passauer Neue Presse."

At the same time, however, he said that farmers and retailers should make out such agreements among themselves, as it was "not the job of the state" to intervene in pricing policies.

Differing proposals

Schmidt's proposals have, however, been rejected by some representatives of the dairy industry.

The chairman of major German dairy association BDM, Romuald Schaber, has called on the government to provide guidelines for regulating production, saying that any other method would lead to a patchwork of solutions.

"It has to be coordinated at a Europe-wide level," he told broadcaster BR, adding that loans and guarantees were no solution, while tax relief, though welcome in itself, would not help in the current situation.

The BDM, which was not invited to Monday's meeting, carried out a protest at Berlin's Brandenburg Gate as the event got underway. The association is calling, among other things, for farmers to receive a 30-cent ($0.33) bonus for every liter of milk that is not produced.

Schmidt has come under some criticism for not inviting either agriculture ministers from the German states or critical farmers' associations to the meeting. The agriculture minister of the state of Schleswig-Holstein, Robert Habeck, said Schmidt had "failed to invite all the people that could be inconvenient to him."

The agriculture minister said after the meeting that he intended to meet with his state counterparts next week.

"The states also have to take on responsibility, and I definitely hear signals that they want to," he said.

Drastic drop in price

Recently, German dairy farmers have sometimes received less than 20 cents per liter, with 35 cents being seen as the minimum price needed to cover their costs. The fall in milk prices in recent months has been caused by large amounts of milk flooding the markets, not just in Germany, but across Europe.

The "milk summit" was also discuss pushing milk prices up from the current average supermarket value of 46 cents in the hope that the increased profits will be passed on to farmers.

However, the consumer organization Foodwatch has criticized the proposal, saying that even if consumers did take a more expensive milk brand, it had practically no effect on the sum received by dairy famers.

A price analysis carried out by the organization showed that even when the most expensive milk was bought, it made a difference of just 5 cents to farmers.

In contrast, retail associations HDE and BVLH maintained that consumers had "the choice to contribute by their own purchasing behavior" in view of the wide range of differently priced milk available at supermarkets.

tj/rc (dpa, AFP)