Brussels, 18/07/2016 (Agence Europe) - The European Commission presented a package of measures on Monday 18 July worth €500 million (EUROPE 11595) to help farmers deal with the current crisis in the dairy, fruit and vegetables and pig meat sectors.
This new raft of measures set out at the Agriculture Council brought a generally positive response from ministers.
After an initial series of aid measures in September of last year (worth €500 million) and supplementary measures in March, farmers will now be able to benefit from a new €500 million package to help redress the impact of the current crisis. European Agriculture Commissioner Phil Hogan pointed out that the EU had spent €1.5 billion since the start of the agricultural crisis. “Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work and continue to provide safe, high quality food for citizens”, he said.
The €500 million package is divided into two parts.
Voluntary reduction in production. The Commission is making €150 million available to provide support - lasting three months - for the voluntary reduction of milk production across the EU by means of an auction system. The system will operate at EU level so that every farmer will be able to take advantage of the scheme. The Commission hopes that, by offering support of between 11 and 14 cents per kilogramme of milk not produced it will prove possible to reduce European milk production by around 1.4 million tonnes.
National envelopes. The sum of €350 million in national grants will be available to the member states to meet the needs of the various agricultural sectors experiencing times of crisis. This will be a sort of cash-flow support. The member states will be able to provide national funding at maximum doubling the money in their national grants from Community funds. France and Germany have underlined that the funding for cash-flow relief must not act as an incentive to produce more. This is to ensure consistency between the two parts of the aid package. Germany will receive the largest share, with a national envelope of €58 million, France will receive €49.9 million, the United Kingdom €30.2 million, Poland €22.6 million, Italy €21 million and Spain €14.6 million.
The Commission proposed five further, more technical, measures.
Voluntary coupled support. The member states will be able to review arrangements on coupled aid (that is, aid still linked to production levels) in the dairy sector with a view to decoupling payments by 2017. This is designed to prevent any increase in production.
Extension of public intervention. Public intervention for skimmed milk, which is due to come to an end on 30 September, will be extended until the end of February 2017, when the standard period will resume. The ceiling up to which skimmed milk powder is bought-in at fixed price will remain at 350,000 tonnes until the end of December 2016. Since the start of 2016, 307,000 tonnes have been bought in.
Extension of private storage aid schemes. Private storage aid schemes for skimmed milk powder will be extended until the end of February 2017 for both the standard (90- to 210-day storage) and the enhanced (365-day storage).
Advance payments. The Commission authorises advance payment of up to 70% for direct payments from 16 October 2016 and 85% for area-based rural development payments, after finalisation of the administrative checks.
Fruit and vegetables. The Commission has pledged to review the support for withdrawals made by producer organisations in the fruit and vegetables sector.
As forecast, the Commission has not given the go-ahead to increasing de minimis aid. Italy, Spain and France, and others, called for a doubling of the de minimis aid (from €15,000 per farm over three years to €30,000). At Monday's Agriculture Council, several countries, including France, Finland and Latvia, regretted that the Commission had declined to raise this ceiling. Stephane Le Foll, the French agriculture minister, said that his staff would send a request to the Commission this week to agree to double the ceiling for the de minimis ceiling.
Risk of “sprinkling” of public money. Providing support of €150 million for the voluntary reduction on milk production “is a piece of good news” since this is the only measure that could bring about a lasting increase in prices, commented MEP Michel Dantin (EPP, France). He fears, however, that the €350 envelope could result in public money being sprinkled around. The European Commission's efforts to try to achieve the difficult balance between the member states and the various agricultural sectors has resulted in a loss of effectiveness, in his view. To make good use of this money, Dantin proposes putting in place a programme to support the cessation of work and early retirement “so that farmers who have had enough can leave with dignity”. Eric Andrieu (S&D, France) welcomed the Commission's mechanism to provide an incentive for regulating production levels. “Providing this envelope will encourage lower production and allow prices to rise”, he suggested. He called on the Commission to make provision for the possible knock-on effect of reduced milk production on the beef sector. “The slaughter of dairy cattle could clog the beef market and cause a further drop in prices”, he warned.
Copa-Cogeca relatively pleased. EU farming and cooperative organisations, Copa-Cogeca, have welcomed the new package but have called for retention of the old voluntary scheme for reducing milk production (Article 222 of the regulation on the common organisation of the market). These arrangements, put in place in April, will expire in mid-October but can be extended for a further period of six months. Portugal has made use of this Article but is virtually the only country to do so (Italy displayed some interest). Copa-Cogeca also wants the €350 envelope to be used to support the dairy sector and also the fruit and vegetable and pig meat sectors. (Original version in French by Lionel Changeur)