Coveney calls on EU to temporarily increase intervention price

The Minister for Agriculture Simon Coveney has called on the EU to temporarily increase the current intervention prices for butter and skimmed milk powder (SMP).

The Minister was speaking after meetings with the European Commissioner for Agriculture Phil Hogan and French minister for agriculture Stephane Le Foll.

A number of options were presented to the Commissioner, a six-point plan, which could help alleviate current difficulties such as using the flexibilities under exceptional measures to temporarily increase the intervention prices for butter and SMP to levels which provide a realistic floor price.

Such an adjustment could provide a much needed positive market signal and a more realistic floor price over a period of acute, but temporary difficulty for farmers, the Minister said.

Hogan said this week that he hasn’t ruled out increasing the intervention price but would make an announcement on September 7.

Another option that was presented to the Commission, was the use of funding from assigned revenues from the collection of superlevy to support the market for dairy products at this time, and if required as EU and Northern hemisphere production increases in the first half of 2016.

The other options presented were:

  • The restoration of Aids to Private Storage for cheese, which was introduced by the Commission in September 2014, and was utilised to good effect by operators in Ireland and elsewhere, but discontinued thereafter.
  • The use of exceptional promotion measures to promote the consumption of dairy and pigmeat products on EU, but especially on third country markets.
  • Increasing the advance of the Basic Payments and other elements of Direct Payments Scheme and from October 16, 2015 to 70%, to alleviate cash flow difficulties.
  • Restoring Aids to Private Storage for Pigmeat , which played a useful role in stabilising pigmeat prices earlier in the year, but had been discontinued.

Minister Coveney called for swift action to restore market confidence in the Dairy and Pigmeat sector.

He also referred to the significant challenges faced by farmers in the face of global price volatility.

“We are all aware that primary producers are extremely vulnerable to downward fluctuations in commodity prices and increases in input costs.

“The current market dynamics are causing particular difficulties for dairy and pigmeat farmers in Ireland and elsewhere,” he said.

The Minister also said that there is no question of reverting to a Common Agricultural Policy focused on market management.

“However, it is precisely to alleviate the worst affects of volatility that the Common Market Organisation Regulation (CMO – 1308/2013) provides for the full range of market support measures, to be deployed as a safety net.

“The Council and the Parliament also recognised, in 2013, that the traditional market support measures may not, on their own, be sufficient to deal with market disturbance and provide, in that context, for exceptional measures against market disturbance,” he said.

These provisions are designed with maximum flexibility and rapid action in mind, and I think it is time now to exploit these possibilities.

He also acknowledged the steps already taken by the Commission, the Minister welcomed the fact that the Commission had acted to extend the dates for Aids to Private Storage and Intervention in the dairy sector.

“I very much appreciate that the Commission has acted to alleviate some of the pressure. I understand the deployment of market or exceptional measures can be a complex matter.

“However, the acute downturn in global milk and pigmeat prices over the past several months, are having a severe impact on farm incomes, and the time has come to explore the possibilities of deploying those and other market support provisions to help to put a floor under the market during this difficult, but temporary downturn,” he said.