Amsterdam, 31/05/2016 (Agence Europe) - European Agriculture Commissioner Phil Hogan, speaking on the sidelines of the informal Agriculture Council meeting in Amsterdam on Tuesday 31 May, said that he would be prepared to consider a fresh package of anti-crisis aid in July, when he will have a clearer idea of the budgetary margins available to him.
He told a small group of journalists that it was unlikely that there would be a new financial aid package at the Council meeting in Luxembourg on 27 June to help alleviate the milk sector crisis. Eight member states have yet to spend any money made available in the targeted aid package approved in September 2015, he pointed out. This money has to be spent before the end of June. “If there is some money still remaining at the end of June, it could be re-allocated to countries”, the commissioner said. If, in July, there is any unused money remaining in the common agricultural policy (CAP) budget, he said he would be prepared to consider a fresh aid package for farmers hit by the crisis. Several sources have indicated, however, that the Commission may very well come to June's Agriculture Council with ideas on additional measures.
The Dutch minister, Martijn van Dam said that, at the forthcoming Council on 27 June, agriculture ministers would assess the impact of the measures in place and whether or not new measures are needed.
Financial incentives. Stephane Le Foll, the French agriculture minister, told a small group of journalists on Tuesday 31 May that, when in China on Thursday, he would speak to his German counterpart about the crisis in agriculture, and the measure on the voluntary restriction of milk production (Article 222 of the regulation on the common organisation of the market). He stated that “production is far exceeding demand. In six months, the intervention ceiling for powdered milk will have been doubled, to 218,000 tonnes”. He said that storage on this scale “has an impact on the market and will continue to have an impact afterwards, when fridges are full”. Production has to be managed, therefore. “Then there is the issue of financial incentives. We're going to do all we can to encourage the European Commission to free up funding from unused budgets, meaning that there will be no need for new funding, to provide an incentive to reduce production”, he stated.
Hogan indicated that, among the countries attracted by Article 222 (voluntary measure to reduce or stabilise the level of milk production) are the United Kingdom, Italy and Portugal. In particular, however, Germany said on Monday 30 May that it had earmarked €100 million (in direct aid and tax breaks) for milk producers. Hogan said that more and more countries were turning to Article 222.
The Portuguese minister, Luis Capoulas Santos, said during a visit to a dairy farm near Eindhoven on Monday that, to re-balance the milk market, “production will have to be reduced a little”. “Farmers have to be compensated for at least stabilising production.” Portugal has put in place national measures under Article 222. According to the minister, Portugal is the only country where production has fallen slightly. He argues that Europe will have to stabilise production for six months, for example. He is in favour of EU funding for Article 222 and suggests re-allocating unspent money from the September 2015 aid package. He said, too, that the commissioner's efforts to open up new markets (increase exports) had to be supported.
The Hungarian minister told the press that he did not want to use Article 222 and that he was hoping for new targeted aid to be released (as in September).
The Slovakian minister, who will chair the Agriculture Council from 1 July 2016, said, on behalf of his country, that she was against Article 22 and backed fresh targeted aid. Milk process are very low (between 20 and 21 cents) and milk is now cheaper than mineral water, she pointed out. She did not hesitate to point the finger of blame at the Netherlands and Ireland, which are continuing to increase milk production without considering the devastating effects of this on the market.
New Irish minister, Michael Creed, confirmed that his country was not using Article 222. Milk production in Ireland has increased by 30%: the minister pointed out, however, that Ireland accounts for only 4% of EU production. Luxembourg minister Fernand Boden said his country was doing its sums on Article 222, with a view to stabilising production (in Luxembourg, production is 20% higher at the moment!). Finland is open to the idea “if everyone else is prepared voluntarily to reduce production” (in Finland, the price of milk is around 34 cents|).
The regulation on the (voluntary) temporary reduction of milk production has been in force since 13 April. Member states may provide national state aid to compensate farmers who agree to reduce production.
Crisis reserve. Portugal would appear to be in favour of dipping into the crisis reserve if necessary. Slovakia too. Sweden is not against the idea but it would depend on the arrangements. France, Ireland and Luxembourg are, at this stage, against use being made of the crisis reserve. (Original version in French by Lionel Changeur)