Brussels, 08/07/2016 (Agence Europe) - The European Commission is presently working on the terms of the new package of measures for the agricultural sectors currently in difficult straits, in particular the milk and dairy products sector. This package is expected to be submitted to the Agriculture Council of 18 July (EUROPE 11581).
At the last meeting of the special committee on agriculture (SCA) on 6 July, indications were given on some of the priorities of the new plan to help farmers. For the moment, no agreement has been reached within the Commission on the extent of or the funding for the new support package and these differences are causing delay on the content.
As Agriculture Commissioner Phil Hogan indicated at the Agriculture Council in June, particular attention will be given to the milk sector, to a supply-side approach and to conditionality. The idea will be to use Community funding to provide an incentive farmers voluntarily to agree to freeze or reduce production temporarily. The Commission is considering how this system could work and is believed to have asked the member states for suggestions. The current provisions of Article 222 (common organisation of the market) will not work because there are no EU funds to compensate farmers who agree to reduce or freeze milk production.
The Commission is investigating the following options: - public intervention and private storage; - paying advances on direct aid to farmers; - rules on de minimis aid (of which the Commission does not have to be notified; the current ceiling is €15,000 per farm over three years); - revision of withdrawal prices in the fruit and vegetables sector. The aid package could be financed by means of a letter of amendment (containing the latest estimates of agricultural spending needs) and the legislative acts approved in September.
At the SCA meeting, several delegations supported the idea of bringing forward a new aid package. Some countries, such as Ireland, were not overly keen on the idea of controlling milk supply. Others, such as Denmark and Sweden, highlighted the need to respect the principle of making the CAP more market-oriented. Several delegations called for a degree of latitude to allow the member states to take account of their specific national situation. Some countries argued for long-term measures, including measures to recalibrate power in the food supply chain.
Market situation. The SCA took stock of the situation on the markets in May-June 2016. Milk collection continues to increase while average farm gate prices for raw milk continue to fall. A slight increase in dairy product prices has been noted (skimmed milk powder is up 4%, cheddar up 5% and butter up 16%). According to the Commission, there are signs that the market is recovering but this has yet to make its way back along the food supply chain to the farmers. Exports, meanwhile, are doing well, particularly to China. Pigmeat production has stabilised and prices have increased (up 11%); exports are going well, with a 35% increase in quantity and 38% increase in value compared with the same period last year.
September 2015 package. Eight member states have yet to declare their spending. Hitherto, €251 million - 60% of the total September 2015 funding - has been spent, with 80% going to the dairy sector. (Original version in French by Lionel Changeur)