Luxembourg, 19/10/2009 (Agence Europe) - As we anticipated, the European commission announced to the European Agriculture Ministers on Monday 19 October that it proposed to grant emergency aid of €280 million in favour of struggling dairy farmers, between 1500 and 2000 of whom came to Luxembourg, where the Council was taking place, to protest. This additional package will be taken from the 2010 budget which, in practice, started on 16 October. Mariann Fischer Boel, the European Agriculture Commissioner, has therefore given in to pressure from the street and the common position of 21 EU countries calling for her to make the money available from the new EU budget.
At a press conference, the Swedish minister and president-in-exercise of the Agriculture Council, Eskil Erlandsson, said that the ministers had made progress in the debate over the milk crisis: 1) the Council has extended public intervention for butter (see other article); 2) the ministers have agreed to accept (in November) the Commission's proposal to extend the "emergency clause", which allows faster intervention in the event of disturbances to the market, to the dairy sector (it is believed that only the United Kingdom objected to this text: Ed); 3) the ministers hope to adopt, as soon as possible, the other proposed text on the modification of the purchase regime for quotas to free up credits for restructuring (most of the countries insisted that the system should remain optional, rather than obligatory as Germany to have preferred: Ed); 4) the Commission will review a number of short-term measures; 5) the Commission proposed additional aid of 280 million for milk producers, as per the request of 21 countries, and the European Parliament is to make the same proposal.
"You have killed the goose that lays the golden eggs", says Ms Fischer Boel
Speaking before the press, Mariann Fischer Boel repeated that she feels that the milk and dairy products market is improving. Looking at the points stressed by the 21 countries, there is only one which I cannot accept, said the Commissioner, referring to the reactivation of aid for the use of powdered skimmed milk in animal feed. She said that she hoped that this aid of 280 million would appease the dairy farmers. "You have killed the goose that lays the golden eggs", the Commissioner warned, adding: "that's it, there is no point in coming to ask for a single euro more". The key for the division of this envelope between the countries of the EU will be based on milk production, but up to the limit of the national quotas allocated to the countries, specified Ms Fischer Boel. The money will go to struggling milk producers.
The European ministers with responsibility for budget will take the decision on this aid of 280 million euros on 19 November (at the second reading by the Council of the draft budget 2010). The 280 million euros will be taken from the margin under the upper limit of the agriculture heading. Although there is a margin of around one billion euros under this upper limit, 420 million have been earmarked for the economic relaunch plan (rural development) and a minimum of 300 million euros must be left to prevent the application of the financial discipline rule (reduction of direct aid if this sum of 300 million is eaten into). This means that if the 280 million announced is also taken out, there will be absolutely nothing left.
Furthermore, the Commissioner noted, sometimes with satisfaction, sometimes with surprise, how the additional money from the Health Check and the Economic Recovery Package is divided. As regards rural development, the Commission stated that the sum of 660 million euros will be used for restructuring in the dairy sector, including 230 million in Germany, 101 million in Poland (but none in France or Slovakia, for example). As regards article 68 (possibility of withdrawing aid from a sector, for example cereals producers, to transfer it to other sectors, such as milk producers), the Commission spoke of transferring 240 million euros in favour of dairy 2010 and 2013 (Belgium, for example, has done nothing in this area).
The Commission presented the ministers with a quarterly report on the situation on the dairy market. The average butter price is currently 18% higher than the intervention price. It was also announced that the management committee may look into plans to include cheese in products eligible for private storage aid. Lastly, on 28 October, the Commission will adopt the proposal which will make it possible to increase (on a temporary basis) the upper limit for national aid to all agriculture producers from 7500 euros to 15,000 euros.
"We have taken back the lead in defining the future of agriculture", said the French minister
"We have made a number of concrete decisions" said the French minister Bruno Le Maire, who is at the head of the 21 countries calling for a new regulation of the market. "The first time, Commission has agreed to put emergency aid of 280 million euros on the table", he said, adding that this was a "wise decision" on the part of the Commission. France will see around 50 million euros of this. Mr Le Maire also welcomed the extension of aid for the distribution of milk to schools. The 21 countries working together over the milk dossier have "taken back the lead in defining the future of agriculture; we have done this in the dairy sector, we will try to do so in other sectors, and from that point of view, this is good news for all farmers", Mr Le Maire concluded.
"The modesty of this aid will not provide the much-needed shot in the arm expected in the countryside", said José Bové (Greens/EFA, France), deputy president of the committee on agriculture of the European Parliament. The agricultural organisations COPA and COGECA welcomed this envelope of 280 million euros. (L.C./trans.fl)