Brussels, 07/09/2015 (Agence Europe) - In response to recent developments on the agricultural markets, the European Commission put a package of measures to the Agriculture Council in Brussels on Monday 7 September to support producers. It has not, thus far, proposed increasing the intervention price in the milk sector.
The package comprises measures to address farmers' immediate needs and longer-term measures, such as strengthening the power of farmers in the food chain.
With Agriculture Commissioner Phil Hogan in hospital in Ireland because of an intestinal virus, the aid package was presented by Commission Vice-President Jyrki Katainen.
The Commission proposed immediate funding of €500 million for farmers, the commissioner said, adding: “This response demonstrates that the Commission takes its responsibility towards farmers very seriously”. Most of this money will come from the revenue generated by the super-levy for breaching milk quotas.
Easing farmers' cash flows problems. The Commission proposes granting direct targeted support for the farmers in the 28 member states (around €450 million in the form of national envelopes). The milk sector will take the lion's share, particularly in those countries worst affected by the Russian embargo. In addition, member states will be authorised to make early payment (on 16 October instead of December) of up to 70% of direct payments (including optional coupled aid and aid for young farmers) and up to 85% of rural development programme payments. Current rules allow member states to pay up to 50% of direct support and 75% of rural development aid early.
Stabilising markets and new outlets. The Commission will bring forward a “new and improved” private storage scheme for powdered milk and cheeses (higher level of aid for skimmed milk powder). It also recommends a new private storage scheme for pigmeat. In addition, extra funding will be made available for promotion, both in the EU and in third countries, of dairy and pigmeat products (the Commission will increase the 2016 budget in addition to the €81 million already earmarked for the purpose).
The Commission also proposes: - to ensure that the Milk Market Observatory meets the needs of the market by providing better information; - to step up efforts to tackle non-tariff barriers in third countries and conduct a series of missions to third countries to open new markets.
Functioning of the supply chain. The Commission will establish a new, dedicated high-level group to focus on a number of specific and clearly defined issues. These include credit for farmers, and financial and risk hedging instruments such as futures markets for agricultural products. The Commission is also looking at amending provisions on the common markets organisation.
Intervention price. The Commission has not, at this stage, proposed an increase in the intervention price in the milk sector, despite the calls of several member states (in particular, France, Spain and Portugal). The Commission believes that increasing the public intervention price is at odds with the common agricultural policy's market-oriented approach. “Moreover, we don't believe that it would solve the current market problem”, Katainen said. “At a time when there is a clear market imbalance, increasing the price paid for public intervention will do nothing to restore market balance but would instead create an artificial outlet for EU dairy products. It would weigh on the EU competitiveness for the 10% (or more) of EU milk production that needs to be exported”, he stated.
Society and agriculture. To tighten the link between agriculture and society at large, the Commission suggests means of addressing the needs of vulnerable groups. In the context of the current refugee crisis, there are ways of addressing the nutritional needs of refugees, for example, through the distribution of dairy products
The Commission highlights that there are also a number of tools that can be mobilised at national level. Member states are able to provide national funding under the de minimis rules (below €15,000 for agricultural primary production or €200,000 for marketing and processing activities over 3 years).
The Commission will set out the details of these measures at the meeting of the Special Committee on Agriculture (SCA) in Luxembourg on 14 September on the sidelines of the informal meeting of EU agriculture ministers. Farmers have not ruled out holding demonstrations next week in Luxembourg if they are not satisfied with the measures announced by the Commission and debated by the Council on 7 September. (Lionel Changeur)