EU agrees principle of CAP deal for milk sector

The council of the European Union has adopted the text for the new seven-year Common Agriculture Policy  (CAP) Reform package. The key features related to dairy sector are as follows.

Milk quotas are confirmed to finish on 1 April 2015. No alternative supply management measures will be introduced. Intervention prices for butter and SMP will remain at current levels. The commission can review reference prices in light of market developments (for example producer margins) but any changes would require approval of both the council and parliament.

The ceiling for buying-in of butter at the intervention price will be increased from 30,000 tonnes to 50,000 tonnes. For SMP, the current ceiling of 109,000 tonnes will be maintained. After reaching these ceilings, buying-in would be carried out through a tender process. The intervention period will be extended by one month, from 1 March to 30 September (currently 31 August). The commission is able to re-open intervention outside this period to handle a market crisis situation.

Private storage aid (PSA) will continue to be available for butter, SMP and certain PDO, PGI cheeses stored beyond maturation. The commission retains the ability to decide when to grant PSA, taking into account the market situation. Aid schemes for processing skimmed milk into casein and for the use of skimmed milk and SMP as feed will not continue in future.

Export subsidies/refunds remain as market management tools but may only be used in the event of a crisis situation. The export refunds budget is provisionally set at zero. As such, tenders may only be submitted when an invitation is opened by the commission in a crisis situation.

EU regulations on health and nutrition claims restrict the use of the term “low fat” for products with a maximum three per cent fat content. This means that butter and spreadable fats are unable to use this term, although the terms “reduced fat” and “light” may be used for any products with a fat content of 62 per cent or below.

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