Brussels, 14/03/2016 (Agence Europe) - In Brussels on Monday 14 March European Agriculture Commissioner Phil Hogan set out for European farm ministers his response, which contained no surprises, to the possible measures advanced to address the crisis in a number of agricultural sectors.
Hogan said he was prepared to: - allow voluntary agreements of producer organisations and cooperatives on production and supply management; - authorise national aid of €15,000 per farmer per year on a temporary basis; - double the intervention ceilings for powdered milk and butter; - put in place a new private storage aid scheme for pigmeat should it prove necessary; - establish a meat market observatory; - examine the feasibility of an export credit instrument; - extend the exceptional measures put in place for fruit and vegetables in the wake of the Russian embargo.
Following the presentation of the catalogue of measures, the majority of ministers spoke to make clear their positions. Belgian minister Willy Borsus, under pressure from demonstrating farmers in the streets of the Belgian capital, tried to prolong the discussions at Council level in an attempt to get more ambitious measures. In the afternoon, the Dutch Presidency of the Council handed ministers a text of measures that could be taken to attenuate the crisis. This text took the form of Presidency conclusions (the unanimity required for Council conclusions being impossible to achieve in the current context).
Hogan provided the Agriculture Council with information on the possible measures.
Managing milk production and supply. Hogan noted that, since milk quotas were abolished in 2015, there has been a significant increase in production in a number of countries (Ed: Ireland, Netherlands, Denmark and, to a lesser extent, Germany and United Kingdom). Discussions within Council have shown that “the return to quotas or any other instrument of mandatory supply control is not on the agenda”, the commissioner was pleased to say. A number of countries have, he said, requested access to the possibility to enable voluntary agreements of producer organisations, inter-branch organisations and cooperatives in relation to production and supply management and he will look favourably on this.
“I am prepared to propose (on the basis of the provisions of Article 222 of the CMO - common market organisation) the application of such rules, whereby the Commission, in a situation of severe imbalance in the market, would decide to permit on a temporary basis such voluntary agreements for the dairy sector”, Hogan stated.
The provisions of the CMO state that any such voluntary agreements should be for six months, renewable once for a further duration of six months. France, in particular, urged that this measure be accompanied by financial incentives financed from, the EU budget. The Commission, however, laid great stress on the budgetary constraints and Hogan made clear his unwillingness to dip into the crisis reserve, at least for as long as possible (a little over €441.6 million at most for 2016).
State aid. A large number of countries argued for a temporary increase, to €20,000 or even €30,000, in the de minimis aid ceiling (the current ceiling is €15,000 per farm over three years). De minimis aid does not distort competition and may be allocated without any requirement to seek the opinion of the Commission. The commissioner noted, however that revision of de minimis “is not an immediate solution as the adoption procedure requires a number of steps which will take at least seven months”. Instead, Hogan would be prepared to authorise exceptional state aid of up to €15,000 per farmer per year with no national ceiling, which would meant that, potentially, all struggling farmers would be eligible for this national aid.
Intervention ceilings. Several countries called for a temporary increase in public intervention ceilings for skimmed milk powder and butter. The current ceilings are 109,000 tonnes and 50,000 tonnes, respectively. Above those ceilings, a tendering system applies. Recent weeks have seen a significant increase in the rate at which products are being out into intervention. The Commission is proposing to double the ceilings for SMP and butter to 218,000 tonnes and 100,000 tonnes, respectively and it undertakes not to release products placed into intervention back onto the market in a manner that would have a distorting impact.
Structures in the dairy sector. Several countries called for a high-level group on milk to be set up. “I am not in favour of a proliferation of expert groups, particularly when there is potential overlap in their work”, Hogan said, highlighting that he had already established the agri markets task force, under the chairmanship of Cees Veerman. This task force is discussing a range of issues: market transparency, access for farmers to financial instruments and futures markets to hedge price risks, options for arranging contractual relations within the chain and legal possibilities for organising farmers' collective actions. “All of this is with a view to improving the position of farmers in the food chain”, the commissioner stated. At the June Council, Veerman will be invited to discuss these matters. Hogan proposed that a meeting or seminar be arranged between high-level representatives of the member states and the agri markets task force, at which structural issues in the dairy sector can be discussed. The task force could be asked to make proposals aimed at addressing some of those structural problems. It is due to report in the autumn and Hogan pledged to follow up on the recommendations, particularly in the area of risk management tools.
Pigmeat. In January, a private storage aid scheme for pigmeat (closed three weeks later) allowed some 90,000 tonnes to be taken off the market at a cost of €28 million. “You all know that the price for pigmeat fluctuates on a seasonal basis and it is important, therefore, that we don't introduce a scheme which results in a very significant volume of product being released into the market at a time when prices are seasonally at their lowest”, warned Hogan. He said he would be prepared to consider the introduction of a new private storage aid scheme, the details of which, including the timing of its introduction, will have to be confirmed.
Monitoring of beef and pigmeat markets. Hogan announced that he was prepared to establish a meat market observatory, covering beef and pigmeat. “I believe that the sectors will benefit from reliable information and credible market analysis”, he commented.
Promotion. The commissioner said that €111 million is available for co-funded projects, with EU support of up to 70%. This funding is available to support promotion in third countries and also to encourage more consumption within the EU. It includes a specific €30 million envelope for dairy and pigmeat. Hogan will increase that allocation to use the additional amount available to reflect the market disturbances in those sectors.
Export credits. Hogan has asked his services to examine the feasibility of a European export credit scheme that could supplement the schemes which member states are operating on a national basis (including a German export guarantee scheme).
International. Hogan recalled the diplomatic-level efforts that had been made to bring an end to the Russian ban on the import of pigmeat and pork products from the EU. He acknowledged, however, that, despite all that had been done, “very little has happened”. (Original version in French by Lionel Changeur)