Brussels, 15/03/2016 (Agence Europe) - The additional measures agreed on Monday 14 March to help milk and pork producers still have to be fully and swiftly implemented (see EUROPE 11511). The Special Committee on Agriculture (SCA) is due to discuss the matter at its meeting on 4 April.
The Dutch minister chairing the Agriculture Council Martijn van Dam said at the press conference after the Council meeting on Monday that last September's €500 million package had had some effect but full attention has to be paid to how it is implemented, as markets have not yet been stabilised.
On 14 March the Council decided, along with the Commission to take further measures. “We have recognised the depth and duration of the global crisis in agricultural markets and its impact in Europe, particularly in the dairy, pig meat and fruit and vegetables sectors”, said van Dam, quoting the text of the Presidency conclusions on the market situation and the support measures. This test calls on operators in the milk and pigmeat sectors to “act responsibly and contribute to restoring balance between supply and demand”. “Supply has to be reduced so that markets can recover”, van Dam added.
When asked by the press, the Dutch minister acknowledged that his country had not spent all of the money it had received as part of the September 2015 targeted aid scheme because “we are asking” our pork producers, in particular, and milk producers to bring forward structural reforms to cut supply. “If we continue to over-produce, prices will stay low”, he stated.
Agriculture Commissioner Phil Hogan told the press that the Commission had presented measures grouped in 13 areas for action. The measures announced will be implemented immediately, he pledged.
France content but not Belgium or the Baltic States. France, which was the first to call for additional measures, expressed its satisfaction after the Council meeting on 14 March. “The agreement delivers on most, if not all, of France's proposals. What is most important is that there was support for these proposals from a large majority of countries”, said French minister Stephane Le Foll at a press briefing on Monday. He was pleased that it had been accepted that “we are over-producing and measures are needed to limit, reduce and control production”.
The Baltic States, on the other hand, were disappointed with the outcome of the Council. Hard hit by the impact of the Russian ban on the import of EU agricultural goods, they called for a fresh package of targeted aid to support the milk and dairy products sector and the pigmeat sector (after the September 2015 package that was worth €420 million). Lithuania, for example, was most unhappy at the lack of solidarity shown and stated that it had used up all the credits from the first aid package and fresh needs were making themselves felt. Italy regretted that there were no credits from the EU budget to provide an incentive for producers to cut milk production and that no progress had been made on the labelling of products.
Belgium, deeply unhappy, said that the agreed measures did not match hopes and would have wanted discussions on the crisis to continue at the Agriculture Council in April. The Dutch Presidency is currently planning to re-discuss the agricultural market situation at June's Agriculture Council. The Dutch Presidency conclusions indicate that the situation will be re-assessed at the June Council “earlier if the market situation urges us to do so”. The Commission has been to consider for the June Council the availability of additional resources, including the possible activation of the agricultural crisis reserve, as a last resort. The European Investment Bank (EIB) has been asked to “come forward with concrete initiatives, including as regards an EU export tool”.
Managing supply and demand. In line with Article 222 of the CMO (common market organisation), the Commission will adopt an implementing regulation authorising producer organisations (POs), PO associations and interbranch organisations which wish to establish voluntary agreements on managing supply and demand. This is an exceptional measure which was included by legislators in the 2013 reform of the common agricultural policy (CAP) but which has hitherto never been used. The Commission states clearly that this is a voluntary system to be used by “recognised” POs, PO associations and interbranch associations to plan production. Member states will have to inform the Commission of how this article is used.
Commissioner Hogan stated at his press conference on Monday that the Commission is allowing the member states to use the targeted aid from the September 2015 package or the rules on state aid that have just been announced (€15,000 per farmer per year) to compensate farmers who agree to cut production.
France believes that (dairy) cooperatives and private enterprises should be covered but the Commission points out that, in the text, no mention is made of cooperatives. The implementing regulation will make things clear and could include cooperatives. The pigmeat sector will also probably be able to benefit from these provisions which allow exceptions to competition rules.
Germany has signalled that it would not give money, even in the form of state aid, to encourage farmers to reduced production (Article 222). It preferred to use public money to address the cash flow problems being faced by milk producers in particular.
Doubling of intervention ceilings. Hogan indicated that public intervention ceilings (for skimmed milk powder and butter) “will soon be reached”. The Commission will double the quantity ceilings to 218,000 tonnes for powdered milk and 100,000 for butter. The Commission says that, in this way, it is clearly undertaking to support the set intervention prices. “If we had remained at 109,000 tonnes, then as soon as the ceiling had been reached, tenders are required for intervention - that is to say, it's the lowest price offered that is accepted. This means, then, that a process of lower prices is triggered. Raising the ceiling will avoid falling through the lower price trap door”, said Le Foll.
Financing. Commissioner Hogan was quite clear. He cannot ask the other members of the College of Commissioners for extra money “when only ten of the 28 countries” have used the money allocated them under the €500 million aid package of last September.
The Dutch Presidency highlighted that it had not been possible to achieve unanimity of view among the ministers on the conclusions since the member states are divided over use of the crisis reserve. Some countries, such as some of the Baltic States, want it to be used, while most ministers are arguing that available margins should be used before turning to the crisis reserve, which is financed by reducing direct payments. Hogan, too, would prefer not to touch the crisis reserve.
Temporary increase in state aid. The Commission will agree to a temporary increase in state aid which will allow member states to provide up to a maximum of €15,000 per farmer per year, with no national ceiling. This can be done immediately and much more quickly than an increase in de minimis ceilings.
Agricultural organisations pretty pleased. Copa-Cogeca is quite pleased with the measures agreed. It is happy that there has been some strengthening of the market tools in the package, including a doubling of the intervention ceilings for skimmed milk powder and butter. It regrets, however, that there was no temporary increase in the EU intervention price for skimmed milk powder (SMP) and butter and withdrawal prices for fruit and vegetables had not been increased. Copa President Martin Merrild felt that this raft of measures “is a step forward but we need to see how it pans out”.
CEJA (European Council of Young Farmers) welcomed the market measures (intervention ceilings, the new private storage aid scheme for pigmeat, greater flexibility on state aid and the creation of a European meat market observatory. CEJA also calls to member states to adjust their rural development programmes as soon as possible in order to include, for example, income stabilisation tools. It calls, too, for new financial instruments and an export credits system to be developed with the help of the EIB. (Original version in French by Lionel Changeur)