Brussels, 12/01/2011 (Agence Europe) - A majority of countries gave their backing on Monday 10 January to the European Commission's idea of voluntarily reducing milk production during periods of crisis to maintain prices. Compensation would be paid to producers who agreed to reduce their supply of milk.
The idea of a voluntary scheme to reduce production with a premium being paid to producers features in the recent European Commission report on the dairy products market and the conditions in the context of phasing out of the dairy quotas system. The text was published on 9 December 2010 at the same time as the legislative proposals on the dairy sector and dairy products (see EUROPE 10274). This mechanism which will give milk producers compensatory payments in exchange for reducing their milk supply in order to prevent any significant market imbalance would be implemented only in exceptional circumstances. At Monday's meeting of the Special Committee on Agriculture (SCA), some 10 member states, including France, Ireland, Italy, Spain, Austria, Bulgaria, Cyprus, Greece and Finland, backed the proposal. However, Denmark, Sweden, the United Kingdom and Latvia expressed scepticism. Denmark indicated that it would prefer to see use being made of intervention and private storage if necessary. The United Kingdom felt that the quota reduction scheme is too complex and difficult to be accepted by citizens. Germany, too, expressed some reservations, as did Portugal.
Discussions on milk revived old arguments: - the delegations of the Netherlands, Denmark, Luxembourg and Ireland to the SCA stated that the soft landing scenario (gradual phasing out of milk quotas) did not reflect the reality in some countries, and called for additional measures, such as a further increase in milk quotas or a reduction (or even the complete removal) of the “super-levy” (a fine to be paid if milk quotas are exceeded)+; - Poland said that it is the 2012 report on the milk market situation that should be used to confirm the abolition of quotas. Poland holds the view that quotas play a positive role in disadvantaged areas. Slovenia also drew attention to the possible negative effect of ending quotas for producers in disadvantaged areas.
Better transparency. In order to continue preparations for ending quotas, the Commission also proposes (in this report) that meetings of the single CMO (common market organisation) and the milk consultative group to discuss market development and perspectives should be considered. More than 10 delegations in the SCA supported the Commission initiatives on transparency. Germany was not overly keen on these ideas. Some countries (Sweden, United Kingdom, Belgium, Czech Republic, Italy and Latvia) back the Commission proposals, so long as genuine added value is brought. The consultation and decision-making functions of each body have to be clearly separated, said Italy and the United Kingdom in particular (these countries take the view that the consultative group should not be able to take decisions).
Implementation of these measures falls within the exclusive competence of the European Commission since it is a matter of comitology. (L.C./transl.rt)