Brussels, 17/09/2009 (Agence Europe) - On Thursday 17 September, the European Commission announced a number of measures to help producers of milk and milk products overcome the current crisis, characterised by a fall in demand and prices. However, apart from a quota buying-up scheme to help restructuring in the sector, Mariann Fischer Boel, Commissioner for Agriculture, did not come up with anything really new. She rejected the appeal from many countries and producers to introduce new market management instruments but gave the go-ahead for a rethink about effective medium and long-term measures and will look at how to improve contractual relations between producers and the dairy industry. Ms Fischer Boel stated: “This package builds on the numerous actions we have already taken, and which seem to be working well”. She also asserted: “We are beginning to see light at the end of the tunnel for our dairy farmers. That's why I am more determined than ever not to go 'back to the future'” (a reference mainly made to countries that want to maintain -after 2015 - quotas and/or the temporary suspension of automatic increases in quotas). The commissioner affirmed that “making a U-turn on decisions taken in the health check is not an option, and is something the European Council asked us explicitly not to do. I am convinced that today's ideas will provide real concrete help to our milk farmers”.
Short-term measures. As previously announced (EUROPE 9978), the Commission will in the coming weeks change the rules on state aid to allow member states to temporarily offer aid of up to €15,000 per producer over three years (as opposed to the current €7500). This derogation will be accorded under the Temporary Crisis Framework, for state aid adopted during times of market upset.
. The Commission will also propose that the dairy sector will in the future be covered by Article 186 of the Single Common Market Organisation, which allows the Commission to take temporary action quickly, under its own powers, during times of market disturbance.
The proposal actually aims to extend intervention for butter and skimmed milk powder and is subject to approval from the Council of Ministers of the EU, following an opinion from the EP. This is a lengthy procedure and lasts several weeks.
The Commission proposes changes to the operation of quota buying-up schemes by member states. Currently, for purposes of restructuring, member states can 'buy' quota from farmers and put this quota in the national reserve. The national reserve counts as part of a member state's total quota. If individual producers go over quota, but the member state as a whole does not - with the national reserve included - no superlevy is paid. The Commission proposes that bought-up quota which is kept in the national reserve should no longer count as part of the national quota when it comes to deciding whether superlevy is due or not. If superlevy is then collected, the part corresponding to the bought-up quota can be used for restructuring.
Medium and long-term measures. The Commission suggests the establishment of a working group of experts from the Commission and member states. This would look in detail into a number of issues, including: the possibility of establishing a legal framework for contractual relations between milk farmers and the dairy industry to better balance supply and demand on the market, while safeguarding fair competition; the conclusions of the report the Commission has promised to deliver by the end of the year on the workings of the dairy sector supply chain; whether a dairy futures market in Europe would help make prices more transparent in the long term and how to spread good practice in terms of production costs and innovation throughout the European dairy sector.
The Commission expects to spend an extra €600 million on market measures this year. Seventy per cent of direct payments may be paid earlier than usual this year in October. Under the Health Check and the Economic Recovery Package, an extra 4.2 billion is available to address 'new challenges', including dairy restructuring. This comes on top of what is already available in Rural Development policy. The Commission has also reinforced the School Milk Programme and promotional measures for dairy products. (L.C./trans/rh)