During a discussion among EU agriculture ministers in Luxembourg on Monday 9 October about the situation facing agricultural markets, EU Agriculture, Phil Hogan suggested reducing the public intervention cap for skimmed milk powder to zero on 1 March 2018 from the usual 109,000 tonnes.
The measure would not scrap the public intervention system, which could be launched if needed in the form of a call for tender, but Phil Hogan said it would operate in a controlled manner depending on market conditions. The Commission wants to avoid EU public stocks of milk powder growing even larger next year. They currently stand at 380,000 tonnes. He said one couldn’t keep on stocking it eternally. This question, however would need to be validated by the EU28.
At this stage, the proposal has not received the support he had been hoping for. Few delegations (Denmark, Italy and Sweden) backed the initiative, which was presented at the last minute. Phil Hogan would like member states to show interest over the next few days so that a formal proposal can be put on the negotiating table.
De-stocking and producer organisations
Another subject of discussion about milk powder arose during the Agriculture Council – what is to be done with the stocks of milk powder accumulated during the dairy crisis in 2016, which are deteriorating in quality. Only 140 tonnes have been sold since the European Commission decided to de-stock. Many delegations, such as France (backed by Denmark, Italy, Lithuania, Slovakia and the Czech Republic) said it was time to find other outlets for the stocks, such as for feeding animals or the disadvantaged. Phil Hogan said all options were being cautiously examined, but none of them were simple.
The Agriculture Commissioner announced the launch of an awareness raising campaign on the utility of dairy producer organisations in order to encourage new ones to be set up and improvements to the existing organisations. An expert group will meet on 19 October to decide on the framework before a meeting of stakeholders on 28 November. Finally, communication missions will be set up on the ground in 2018.
Close eye on sugar, pork and Mercosur
Over and above these questions, the European Commission said that the farm markets had tended to stabilise in recent months, but vigilance was needed in two sectors: sugar, whose production quotas have recently been abandoned (see EUROPE 11874) and pork, exports of which have shrunk in recent months and are forecast to fall by 9% in 2017 due to falling demand from China and high prices in the EU, which are making exports less competitive. The Commission services expect the reduction to be partially reversed in 2018.
France (backed by Austria, Hungary, Ireland, Luxembourg, Poland, Romania, Slovenia and Slovakia) expressed fear about the current negotiations with Mercosur and concessions made on beef (70,000 tonnes) and ethanol (60,000 tonnes). Phil Hogan justified this by saying that they couldn’t make progress in the negotiations without making a credible offer on these two products. He added that the South American partners had been ‘disappointed’ with the offer.