Commission announces measures to solve dairy crisis

The European Commission announced today a second package of exceptional measures to try and solve the deepening crisis in the Dairy and pigmeat sectors.

Only last September, the Commission announced a €500m support package for the sectors and today it continues to acknowledge the depth and duration of the current agricultural crisis.

European Agriculture Commissioner Phil Hogan announced the measures at a meeting of EU Agriculture Ministers in Brussels today.

“In the interest of EU farmers, I am prepared to use all instruments that the legislators have put at our disposal, both as a short term and long term measure,” the Commissioner said.

He said the Commission must use the appropriate instruments and actions to enable farmers to be resilient in the face of volatility whilst providing immediate assistance to them.

“Today’s response is a comprehensive one, taking on board as many of the proposals as can be done, within the legal and budgetary constraints that apply to all of us.

“I believe that this is a package of measures which, when taken with the full implementation of the September solidarity package, can have a material and positive impact on European agricultural markets and it should now be given the chance to succeed,” Commissioner Hogan said.

Key new measures

Application of voluntary supply management (article 222)

The Commission will activate, for a limited period of time, the possibility to enable producer organisations, interbranch organisations and co-operatives in the dairy sector to establish voluntary agreements on their production and supply.

This is the so-called Article 222 from the Common Market Organisation (CMO), which is specific to the agricultural sector and can be applied in case of severe imbalance in the market.

The Commission has concluded that the strict conditions for the application of this article to the dairy sector are fulfilled in the current circumstances.

This is an exceptional measure, which must also safeguard the EU internal market and was included by the legislators in the 2013 CAP reform but never used before.

Temporary increase in state aid

The Commission will give its full consideration to a temporary acceptance of state aid that would allow MS to provide to a maximum of €15,000 per farmer per year and no national ceiling would apply. This can be done immediately and much more quickly than an increase in de minimis ceilings.

Doubling intervention ceilings for skimmed milk powder and butter

The Commission will increase the quantity ceilings for skimmed milk powder and butter put into intervention from 109,000t and 60,000t respectively to 218,000t and 100,000t.

This way, the Commission says it clearly commits to supporting the fixed intervention price.

Strengthening the producer in the supply chain

The role and position of producers in the food supply chain continues to be of great concern. The Agricultural Markets Taskforce, launched as part of the €500m support package from September 2015, will deliver in autumn conclusions and legislative recommendations to improve the balance in the chain.

It was decided today that High Level national representatives will meet with the Agricultural Markets Taskforce with the view to specifically look at the dairy sector.

Support for pigmeat sector

In response to the proposals for a new private storage aid scheme for pigmeat, Commissioner Hogan will consider the introduction of a new scheme. The details of the scheme, including the timing of its introduction, will have to be confirmed.

International Trade

In relation to negotiations on TTIP and Mercosur, the Commission is well aware of the agricultural sensitivities.

Commissioner Hogan alongside the college of Commissioners is determined to promote the EU’s interests and open up new markets for EU products, while negotiating a differentiated treatment for sensitive products. While new markets are crucial for European agriculture, so too is a differentiated treatment of sensitive products.

Promotion

Promotion campaigns are a key instrument in finding new markets and over €110m are available for 2016 only to support promotion of EU agricultural produce within the EU and on third countries.

Over €30m are specifically earmarked for the pigmeat and dairy sectors, a commitment made last September. An additional amount is added today to the €30m to reflect the market disturbances in those sectors.

Russian/SPS Bans

The Commission as a whole is relentlessly continuing its efforts to lift the phytosanitary Russian ban. Despite our efforts to try to ensure a rapid resumption of trade between the EU and Russia, very little has happened.

However, important progress has been made in lifting of unjustified or disproportionate phytosanitary measures by third countries which will contribute to substantially increased trade flows.

This includes progress in the US, Japanese, Brazilian and Ukrainian markets.

Financial instruments/European Investment Bank/European Fund for Strategic Investments

The Commission will prioritise its engagement with the EIB, with a view to developing appropriate financial instruments to assist farmers and processors to invest in their enterprises to improve the competitiveness of those enterprises or to invest in making any necessary structural adjustments.

Member States are also encouraged to make full use of the opportunities offered by the European Fund for Strategic Investment for investment in the agricultural sector and to look into the possibilities of setting up dedicated platforms for EFSI financing.

Export Credit

The Commission is examining the feasibility of an export credit scheme, which could supplement the schemes which Member States are operating on a national basis scheme. In that regard, the Directorate General for Agriculture is stepping up its contacts with the EIB and the relevant agencies in the Member States.