Brussels, 12/04/2016 (Agence Europe) - Private and cooperative producer and delivery organisations are now able to conclude an agreement for voluntarily reducing milk production. The state can encourage this and help them in this task but it cannot impose this on them.
The regulation on voluntary limits on milk production, in derogation of European competition law as stipulated in Article 222 of the Common Market Organisation (CMO), was published on Tuesday 12 April in the EU Official Journal and enters into application as from Wednesday 13 April.
Commission implementing regulation 216/559 authorises agreements and decisions on the planning of production in the milk and milk products sector and states that "it is appropriate to allow for voluntary agreements and decisions of recognised producer organisations, their associations and recognised Interbranch organisations to plan production on a temporary basis for a period of six months".
Such agreements and decisions on planning of production should be temporarily authorised during six months, coinciding with spring and summer, which is the high production season in the milk and milk products sector and should therefore have the most significant impact. In accordance with the first subparagraph of Article 222(1) of Regulation (EU) No 1308/2013, an authorisation is to be given on the condition that it does not impair the functioning of the internal market and that the agreements and decisions strictly aim at stabilising the milk and milk products sector. That specific condition excludes agreements and decisions that directly or indirectly lead to partitioning markets, to discrimination based on nationality or to fixing prices.
Commission services have indicated that this does not involve national decisions but rather those made by the different economic stakeholders in this subsidiary. It also explained that the state could simply encourage limiting production and possibly introduce national funds for paying state aid to producers whose rules should be come more flexible. In exchange, producers make commitments to at least freezing their production or reducing it.
Sources at the European Commission have indicated that this measure remains voluntary and that imposing a regulation, even if it were temporary, would mean reintroducing quotas and that there was no question of this at this current time. The European Commissioner for Agriculture, Phil Hogan, is against any binding agreement in this connection and said that the member states had not requested one either. On Monday, however, he did admit that the milk market was not improving. Milk production in the EU continues to increase on a market where demand is not absorbing supply any more, explained the Commissioner. The main increases have been experienced in the Netherlands, Germany and Ireland. At the beginning of September 2015, the Commission earmarked €500 million in emergency aid. Out of this amount, €420 million went to targeted assistance distributed among the different member states. Nonetheless, at the end of February, only €160 million had been spent and eight member states had used almost all the share they had received, explained the Commission. The 28 member states now have until 30 June to use up this funding. (Original version in French by Lionel Changeur)