Brussels, 14/07/2016 (Agence Europe) - The European Commission is expected to set out for agriculture ministers meeting on Monday 18 July a new package of measures to support the milk sector (see other article). The aid will be conditional on reducing production.
After his meeting with Budget Commissioner Kristalina Georgieva on Wednesday 13 July to assess the degree of financial flexibility available to him, Agriculture Commissioner Phil Hogan is likely to submit a new aid package worth, sources say, €300 million (some sources speak of €250 million) to the Agriculture Council. This money is likely to come from the 2016 budget, making use of margins that are still available. The support will be targeted principally at the milk sector but aid will only be granted to producers who agree to reduce or to freeze production for the purpose of restructuring the sector. Milk supply will have to be reduced for a period of three months.
Some sources suggest it will be a two-part programme: 1) funding (national envelopes) to provide liquidity for farmers facing difficulty (liquidity assistance); 2) Community funding to compensate milk producers who reduce production.
The Commission would thus improve the current provisions of Article 222 of the common organisation of the market (CMO) which came into effect in mid-April (temporary derogation from competition rules allowing producer organisations and cooperatives to come together to manage supply). This optional instrument was not used by the member states (only Italy and Portugal showed any interest in it) as no European money was available to provide an incentive for farmers to cut production levels.
Farmers' organisations critical already. “Everything suggests that the 18 July proposals will still be based on voluntary reduction. As things stand at present, no collective approach is planned”, regretted European Coordination Via Campesina on Thursday 14 July. It says the scheme as proposed could lead to an increase in production in some countries and a reduction in others. The effectiveness of the measures will, thus, be “reduced to zero”, the organisation fears.
The European Milk Board (EMB) warns: “The milk producers must be offered a time-limited voluntary restraint on supply with the same terms and conditions on a binding basis throughout the EU”, otherwise some will take advantage of the situation to increase their market share. The EMB adds that, alongside this voluntary reduction, the Commission must impose a temporary cap on production for producers not participating in the reduction scheme - a return to the quotas the Commission no longer wishes to countenance.
Other measures planned by the Commission. The Commission is also planning other measures to help farmers through the crisis, such as early payment of direct aid, doubling the cap on de minimis aid (from €15,000 per farm over three years to €30,000) and reviewing withdrawal prices in the fruit and vegetables sector. (Original version in French by Lionel Changeur)