Brussels, 14/10/2014 (Agence Europe) - The Special Committee on Agriculture (SCA) will discuss compensatory aid for the countries hardest hit by the Russian embargo on EU dairy products when it meets on Monday of next week. That was the upshot of discussions at the Agriculture Council on Monday 13 October, at which the Russian ban and the situation in the dairy and dairy products sector were debated.
The aim is to grant highly targeted aid to dairy producers in the three Baltic States (Estonia, Latvia and Lithuania) and perhaps Finland. Commissioner Dacian Ciolos confirmed that financial instruments would be needed to address the urgent problems faced by these four countries. The Baltic States, he acknowledged, had been very badly affected. At this point, there is no indication of the measures that might be taken. However, the amount of aid available will be limited, Ciolos has indicated.
Application of the solidarity principle towards these countries was, in general, well supported within the Council. Germany was somewhat cautious about the suggested targeted aid. France supported the aid but stressed above all that use of market instruments would be best. France, Poland and Belgium called for intervention prices to be increased.
Poland stated that it, too, wanted to be eligible for the measures being considered for the Baltic countries. For the moment, however, Poland does not meet the criteria. First criterion: the countries to receive this aid are those which traditionally export more than 15% of their milk production to Russia (that means the three Baltic States and Finland, with the other member states exporting between 0 and 4%). Second criterion: price reduction - of the countries which export more than 15% of domestic production to Russia, it is the Baltic States which have experienced the biggest drops in price (more than 20%) and prices around, or even below, the intervention price. In the Baltic countries, processing of the milk into products other than “Russian market” cheeses would appear to be difficult. In addition, the industry in these countries restricts access to intervention measures and private storage.
Export refunds. Poland has also requested a raft of measures in the milk sector, including export refunds and changes to the milk fat rates (which is equivalent to an increase in milk quotas). These requests, however, were opposed at the Council. Germany, the Netherlands and Sweden oppose a return to subsidies for exports (the Commission is not in favour of them either). Spain supported Poland's request for export refunds. There is no majority in favour of changes to the fatty matters coefficient. Spain also supported French requests for increasing intervention prices.
Agricultural crisis reserve. France, Germany and Ireland have expressed their misgivings about the project (examined by the College of Commissioners Wednesday, 15 October, EUROPE 11175) to mobilise funding for aid to producers affected by the Russian embargo (the agricultural crisis reserve).
Milk sector measures. The impact of the measures taken at the beginning of September to stabilise the market (extending intervention until the end of the year, private storage for butter, skimmed milk powder and cheese) will not be immediate but the market has been reassured. Until now, slightly more than 11,800 tonnes (t) of butter, 5,600 t of powder and 100,000 t of cheese were proposed as part of the private storage initiative.
Pork meat. Dacian Ciolos admitted that this sector was to be scrutinised very carefully because in addition to the effects of the embargo, the current situation is a difficult one. The Commission is not ruling out adopting measures in this sector, if necessary.
Fruit and vegetables. The Netherlands has asked for permission to use Article 222 from the regulation on the Common Market Organisation (CMO) for tomatoes, which would allow for derogations to competition rules (by providing a certain leeway in the area of coordination between producer organisations). (LC)