Brussels, 05/03/2014 (Agence Europe) - On Monday 3 March, the experts of the EU member states were divided over the need for measures to remedy crises and the enormous volatility in prices in the milk and dairy products sector.
The Special Committee on Agriculture (SCA) continued the talks which started at the most recent Agriculture Council on the consequences and measures to be taken when the milk quotas are phased out in full from 1 April 2015 (see EUROPE 11020).
The Greek Presidency asked the SCA delegations two questions: (1) what tools will be needed to reduce the volatility in prices, particularly in disadvantaged regions; (2) what additional tools could be used to take account of the risks taken by investors (investments in new processing capacities)?
Many delegations (including Italy, Spain, Poland, Slovenia, Finland, Romania, Austria and Bulgaria) said that the existing measures (milk package and reformed agricultural policy) will not be enough once quotas come to an end, particularly in the least-favoured or mountainous areas, which have been extremely hard hit by the effects of liberalisation (price volatility, crises). These countries argue that milk is the only production possible there and would like to see targeted measures adopted. Some countries, such as Poland, Hungary and Belgium, called for a revision of the reference prices. In the view of a group of countries (Germany, Denmark, the Netherlands, Sweden and the United Kingdom), the raft of measures now available is broadly sufficient.
As regards the role of investors and any penalisation of the risk in the event of crisis, the majority of countries (including Ireland, Denmark, Croatia, Spain, Sweden, the United Kingdom and Denmark) want investors who have taken risks by modernising their production tools not to be penalised post-2015. In the view of certain countries (including Italy, the Netherlands, Sweden and Denmark), after 2015, no measures to restrict offer should constitute a solution. If the milk market in the EU proves to be saturated, the sector will have to start looking internationally (comment by the German, Irish and Danish delegations). Just a handful of countries (Belgium, Romania, Slovenia, Portugal and Bulgaria) raised the issue of the balance between the freedom of enterprise and risks of overproduction or volatility.
On the soft landing, certain countries (Ireland, Denmark, the Netherlands, Luxembourg and the Czech Republic) would like the implementation of general measures (such as a modification to the fat content coefficient, a reduction of the superlevy, and increasing quotas) and others (including Austria, Belgium, Poland and Germany) laid particular emphasis on the modification of the fat content coefficient.
With regard to this, the Commission representative explained that if a decision is made to modify the fat content coefficient, this would have to be taken quickly, before the start of the growing year on 1 April. A number of countries (among them France, the United Kingdom, Sweden, Finland and Slovenia) believe that any new measures regarding the soft landing could call into question the agreement of 2008 on the milk package and would risk opening Pandora's box, with budgetary consequences.
Many countries (Ireland, Poland, Belgium, France, Portugal, Romania, Austria and Slovakia) support the initiative taken by the Commission to create a dairy market observatory, as long as this actually makes it possible to anticipate crises in the sector and to make the necessary decisions. A few delegations (including the Netherlands and Latvia) are concerned that this observatory would become a bureaucratic structure.
Working document. The European Commission presented a working document on the existing measures in the milk sector following the reform of the CAP: http://1drv.ms/1gP2kAk
With regard to this list, certain countries (such as France, Finland and Austria) asked how these measures would dovetail with each other in the event of crisis.
The SCA is to come back to the subject of the dairy sector, as will the Agriculture Council.
At the most recent Council, two opposing blocs formed within the Council. Some of them (the Netherlands, Austria, Ireland, Luxembourg, Denmark and Sweden) called for the level of the superlevies (in the event of exceeding quotas) or fat content coefficients (which has the effect of raising quotas) to be reviewed. Another group of countries (including France, Spain, Belgium and Poland) wanted these measures to be scheduled for post-2050 in order to react as effectively as possible to any crisis in the sector. (LC)