Luxembourg, 15/09/2015 (Agence Europe) - Most of Europe's agriculture ministers supported the European Commission's proposals on the €500 million aid plan (with €420 million in country-specific aid) for dairy and pig farmers when they met informally in Luxembourg on Tuesday 15 September (see EUROPE 11383).
Austria and Poland and to a lesser extent Italy and Belgium, were critical of some of the measures or on the amount of targeted aid. Farmers belonging to the EMB (European Milk Board) demonstrated in Luxembourg around where the ministerial meeting was taking place.
Discussion will continue to finalise the technical details of the aid plan, so that the measures can be in place around mid-October. The Agriculture Council of 16 November will return to the issue of the crisis in the livestock sector to assess the impact of the measures taken.
Several countries, among them France, Ireland, Belgium, Portugal and Spain, said that the need for new market measures had to be evaluated. They refloated the idea of temporarily increasing the intervention price in the dairy sector but the Commission is against any such move, as are several, so-called liberal, countries such as the United Kingdom, Denmark and the Netherlands. Poland said that this was not the time to raise the intervention price.
At a press conference, the president in office of the Agriculture Council, Fernand Etgen, said: “On the whole, most ministers welcomed the measures announced”. He made clear, however, that, for the Council, this is the “initial response to the situation”, with some ministers suggesting that the package could be improved. The package will only have an effect if the flexibility needed is there, added Etgen, alluding to early payments and the use of the by-country funding. He also called for flexibility in this, the first year of application of the new common agricultural policy (CAP).
European Agriculture Commissioner Phil Hogan spoke of the problems of surpluses on the market, not only in the EU. A better solution than intervention exists, he said: private storage for powdered milk, cheese and pigmeat, along with measures to promote products and to win new markets. Provision of dairy products to help refugees will be managed by the Commission's humanitarian aid departments. Germany is believed to have said that the aid should go to the appropriate third countries before the migrants set off for the EU. Hogan also said progress was being made on the food chain.
€420 million in targeted aid. Out of the total €500 million in aid, €420 will go to targeted aid, €30 million to promotion of EU products (milk and pigmeat), around €30 million to refugee aid and around €20 million to private storage (milk, cheese and pigmeat).
Commissioner Hogan set out the national envelopes: - 80% of the €420 million will be allocated on the basis of member states' milk quotas in the last quota year, 2014; - for the remaining 20%, criteria were brought into play so as to help the countries hardest hit by the fall in pigmeat prices and by the effects of the Russian ban in the import of EU agrifood products, the low dairy sector prices (in particular in the Baltic States and Finland) and of lack of rainfall this summer (in Poland and Romania especially).
The aid will therefore be shared out with the biggest producers of milk receiving the highest shares. Germany, as the largest producer, will receive €69 million, France, the second largest, €62.9 million, the United Kingdom, €36.07 million, Poland, €28.95 million, the Netherlands €29.94 million, Spain, €25.53 million, Italy, €25.02 million, Ireland, €13.73 million, Finland, €8.99 million, Lithuania, €12.63 million, Denmark €11.10 million, Romania, €11.15 million, Belgium, €13.05 million, Sweden, €8.22 million, the Czech Republic, €11.16 million, Austria, €7 million, Hungary, €9.51 million, Latvia, €8.45 million, Estonia, €7.56 million, Portugal, €4.76 million, Slovakia, €2.46 million, Bulgaria, €6 million, Croatia, €1.81 million, Greece, €2.26 million, Slovenia, €1.37 million, Luxembourg, €0.67 million, Cyprus, €0.35 million and Malta €0.12 million.
Hogan told the member states that he was ready to allow them maximum flexibility to target aid for appropriate measures to address the negative market impact on farmers, including those farmers impacted by falling dairy and pigmeat prices or who have been affected by drought.
The targeted aid will be adopted by the Commission by means of delegated acts (the Council and Parliament have two months to challenge or accept any act).
At Tuesday's Council, Austria expressed great disappointment at receiving only 1.6% of the total when it felt that it had contributed much more under the super-levy (the revenue from the super-levy is financing a large part of the €420 million). In addition, it wanted account to be taken of less-favoured areas. Poland was unhappy because it felt that, in the allocation it received, not enough account had been taken of the damage done by the drought, particularly in the dairy sector. Italy was critical of the allocation formula and said that some of the criteria used were not objective. Belgium was of the opinion that the targeted aid was not sufficient, given the difficulties in which farmers find themselves.
Private storage aid. The aid for skimmed milk powder will rise from 16 cents per tonne per day to 36 cents per tonne per day. It will be possible to pay this aid for a year (rather than the three or seven months under the current system). It will be possible to leave the storage system after nine months, before the end of the period, but penalties will apply. Officially, no ceiling has been set on quantities (though a budgetary ceiling has been set by the Commission) but estimates put the amount of skimmed milk powder that will be put into private storage at 100,000 tonnes, around 10% of EU production. Ireland, France and Spain welcomed the improvements made to the private storage system in the dairy and pigmeat sectors.
Portugal stressed the need to give thought to an alternative to the quota system of production (which ended on 31 March).
Cheeses. The new scheme for cheese will provide for a total of 100,000 tonnes to be broken down by member state, with 25,000 tonnes for Germany, 20,695 tonnes for France, 12,000 tonnes for Italy and 8,700 tonnes for the Netherlands. All cheeses should be eligible but they have to be able to resist storage (maturation and ripening). Storage may be for 60 to 210 days (to be amended if necessary). Payment of the private storage of cheese will be €15.57 per tonne, plus 40 cents per tonnes per day. Not all countries will take advantage of this measure. Hogan said that any unused allocations will be available for redistribution after three months to those member states which wish to make greater use of the scheme.
Italy felt that it had not been given a large enough allocation for the private storage of cheese.
Pigmeat. The Commission has also proposed a new private storage system for pigmeat. The storage system, used at the start of 2015 will be made more efficient and attractive. The price will be higher (€3.6 per tonne per day, 20% more than in March of this year) and the scope will be extended to include fresh bacon (in response to the impact of the Russian embargo). At the Council meeting, Denmark suggested extending the scope to fats and offal. Belgium would have preferred to see more structural measures, such as the early slaughter of piglets.
The Netherlands and the United Kingdom spoke of the need for long-term consideration to be given to restructuring the dairy and pork sectors.
The new private storage rules will be adopted through implementing acts (following a vote in the EU management committee).
Early payments. Member states will be empowered to make early payment (on 16 October rather than in December) of up to 70% of direct aid (including optional coupled aid and aid to young farmers) and up to 85% of rural development aid. Current rules allow the member states to pay up to 50% of direct aid and 75% of rural development support early. Hogan made a concession in accepting that the advances may be paid once administrative checks are completed. It will not be necessary to wait until all the checks are carried out on the ground. This, however, is an exceptional derogation, the Commission stresses. The new rules on early payments will be adopted by means of implementing acts.
Hungary wanted to be able to make early payment of more than 70%.
Promotion. Additional funding is planned for promotion, both in the EU and in third countries, of dairy products and pigmeat. The Commission will increase the 2016 budget by €30 million, on top of the €81 million already scheduled.
State aid. Several countries, including Italy, Poland and Finland called for great flexibility in the payment of state aid above and beyond the de minimis ceilings set. The Commission will consider allowing member states to provide complementary national aid to increase support to the measures taken under the targeted aid envelopes, the commissioner said in response. The liberal countries are very reticent about paying state aid, however. (Lionel Changeur)