As part of the public consultation on the future of the common agricultural policy (CAP), the think tank Momagri was keen on Wednesday 1 February to highlight the success of the measure to cut milk production (see EUROPE 11714).
The European Commission permitted European producers to reduce production in return for minimum aid of 14 cents per litre of milk not produced. The goal was to rebalance the market by reducing production by 2.8% within the EU in the fourth quarter of 2016 (see EUROPE 11648).
Momagri says in a press release that 27 of the 28 member states triggered the process, making use, too, of the option to top up the money provided by Europe. France elected to increase to 24 cents the aid per litre of milk not produced, up to a maximum of 5% of production.
Belgium, Ireland and Portugal made most use of measure. Momagri devised an indicator of the level of take-up of the scheme combining two variables: the percentage of production that was pledged to be reduced and the percentage of farmers involved in each member state.
Belgium topped the table, with 45.5% of Belgian producers adopting the measure and reducing production by 3.3%. Ireland and Portugal came next, then France (32.3% of producers and a 2.9% cut in production) and Germany (18.4% of producers and a 3.6% reduction).
“The current increase in prices is in part due to the measure to reduce milk production, which cost €150 million” (not counting the top-ups that member states choose to award), says Momagri. This, it argues, is a “very modest sum to put the European milk sector, which has an annual turnover of €97 billion (source Eurostat), back on track”.
Momagri considers that this measure could have been put in place earlier. That would have prevented the huge increase in stocks of powdered milk (to 355,000 tonnes) costing over €600 million. Indeed, the think tank says, the scheme achieved something more: it proved that “regulation is not dead” (see EUROPE 11637). (Original version in French by Lionel Changeur)