Brussels, 14/07/2014 (Agence Europe) - The debate on milk has closed and there will be no new measures to compensate for the end of dairy quotas in 2015. Following six months of debates, the Agriculture Council, which is highly divided over the issue, failed to adopt conclusions in Brussels on Monday 14 July on a “soft landing” (measures to be taken ahead of the end of milk quotas in 2015) in the milk and dairy products sector.
Germany therefore ultimately fails to win out. The Italian Presidency opened the debate on milk on the basis of the text discussed in Luxembourg last month. In other words, it did not propose any new draft text conclusions. Germany, Austria and the Netherlands, however, wished to table a new conclusions text. On the “soft landing” section, these countries called, amongst other things, for the level of the super-levy (fine in the event of milk quota overrun) to be capped at €110 million for the year 2014-2015. According to certain sources, the estimated level of the super-levies is expected to be in the neighbourhood of €600 million. This means that the text effectively implied a €500 million gesture towards the countries affected by the quota overruns. The text formally proposed by the Netherlands was supported by ten countries representing a total of 137 votes: the Netherlands, Germany, Austria, Poland, Ireland, Spain, Luxembourg, Estonia, Belgium and Latvia.
A very strong blocking minority (eleven countries of the EU) took position against the text (130 votes): France, the United Kingdom, Portugal, Hungary, Cyprus, Romania, Bulgaria, Croatia, Slovenia, Slovakia and the Czech Republic. Additionally, Finland, Denmark and Sweden took position against the text, but declared themselves to be open to continuing the discussions. Denmark had reservations regarding the part of the text relating to risk and crisis management measures in the sector, making it 164 votes against this section, if these three countries are added (137 votes in favour).
The president-in-exercise of this Agriculture Council, Maurizio Martina, noted that there was no qualified majority on the text and decided to stop discussions there (meaning there will be neither Council nor Presidency conclusions). The Presidency noted that the Council would not re-open the agreements concluded in 2008 (CAP health check) and 2013 (reform of the common agriculture policy) on milk. It is worth noting that, before taking up the reins of the Presidency of the EU, Italy was one of the countries with reservations about measures which would have the effect of increasing quotas.
The idea of increasing milk quotas by 1% in 2014-2015 was discussed last week by a number of countries, but was not put on the table of the Agriculture Council as it could technically function, according to an expert. Having taken a decision at a given point in time on changing the fat content coefficient, the effects of this would not be measured until the end of the milk production year, which means that there would be nothing to guarantee that this decision would correspond to a 1% increase. Over the last five years, dairy quotas have been increased by 1% a year, but no such increase was laid down for 2014-2015 in the CAP health check. In that health check, a decision was made to halve the fat content coefficient (from 0.18 to 0.009).
Many delegations supported the need to close the debate on milk, because the longer this goes on, the longer uncertainty will continue, which could be harmful to the farmers, as it will have an impact on their production choices. Indeed, the longer the ministers spend discussing the subject, the higher the potential level of the super-levy would rise.
Austrian Minister for Agriculture Andrä Rupprechter was reportedly furious at the Council's non-decision, and threatened to boycott the informal meeting of the European agriculture ministers in Milan this September, and to table Italy's problem on the recovery of the dairy debt (see EUROPE 11119). (LC)