Brussels, 16/03/2015 (Agence Europe) - As a result of the effects of the Russian ban on agricultural products of the EU, amongst other things, the Agriculture Council stood divided, on Monday 16 March, on the current situation of the milk and dairy products market.
During the debate on the situation on the milk market, Germany welcomed the end of milk quotas at the end of March. The German minister Christian Schmidt in particular stressed the need to focus on exports. He argued that the fact that overproduction is less than anticipated is evidence that the market is functioning properly. The Irish Minister, Simon Coveney, said that the market is largely favourable at the moment.
Sweden said that the market was difficult, but that greater emphasis should be laid on exports and research.
Countries hard pressed. Poland pointed out that its producers were in a very tough situation, particularly as a result of the Russian ban. The country called for additional management instruments, arguing that the current safety net was not enough. More specifically, Poland called for the intervention price to be raised. Spain also finds that the measures taken in the dairy sector (butter and milk powder) in response to the Russian ban were insufficient. It called for the intervention price is to be revised. Along the same lines, Lithuania said that the measures taken to date (aid to private storage, direct assistance to the Baltic states and Finland and then a staggering of the payment of the super-levy) were insufficient.
Crisis management instruments felt to be inadequate. Italy said that the crisis management measures were inadequate. Maurizio Martina, the Italian minister of agriculture, referred to the income stabilisation tool (aid in the form of insurance in the event of a loss of 30% of income). Italy argues that the 30% level is not adequate for the situation experienced by dairy producers. France also believes that the threshold of 30% is too high.
Fat content. The Netherlands have not lost hope of returning to the sensitive issue of changing the fat content coefficient for milk (which would equate to a slight increase in the quotas for 2014/2015). The Austrian Minister, Andrä Rupprechter, added that he also supports reopening the debate on this subject. Readers may recall that for the last two years, there has been no qualified majority at the Council to change the level of fat content in milk.
Super-levy to be paid in three instalments. A number of countries, among them Germany, the Netherlands and Poland, lamented the fact that the measure decided upon (payment in three instalments of the total super-levy for the 2014/2015 year) will not allow the states to pay the fine in three interest-free instalments (only the producers will be able to do so) (see EUROPE 11272).
Market Observatory. Many countries called for improvements to the Milk Market Observatory: Germany (which called for an instrument to identify future trends on the market), Ireland (more work needed on future trends, so that the contract system works better), France (which called for a link to the contracts), Finland (improved prediction of future trends) and Spain (which feels that new indicators are needed to follow disturbances better). Belgium and Greece took the floor to call for the Observatory to focus more on profit margins (to activate market measures) rather than just prices.
Additionally, Italy, supported by the United Kingdom, stressed the importance of making reference to the origin of milk. Spain called for the milk market situation to be discussed again at Council level in June (following its discussion at the January Agriculture Council). (Lionel Changeur)