The European Commission is expected to stringently examine the Dairygold proposal to help its farmer members with a re-payment plan.

A Brussels’ source has told Agriland that European authorities will examine every aspect of the Dairygold scheme, so as to ensure that it does not breach any of the current regulations relating to national or state aids.

“I am not saying there is anything wrong with the re-payment proposal. However, I doubt if the European Authorities will allow it until they have scrutinised its every detail. And that may take some time.

“Brussels is extremely sensitive about any initiative that could be perceived as circumnavigating the current quota regulations. And the same logic will come in to play should Ireland push to secure a butterfat re-adjustment for 2014/’15.”

The source went on to say that the Commission views this as simply a way of allowing dairy farmers in the EU to increase dairy output while the milk quota regime is in place.

“And they just won’t tolerate this. Strategically, it would be wrong for Ireland to push the butterfat adjustment issue at the present time. The Commission is already lobbying to the effect that the last thing Europe needs now is an upsurge in milk output, given the recent food import ban introduced by Russia.”

Later this week, the EU is expected to introduce Aids to Private Storage for butter and skimmed milk powder. “It is inconceivable that the Commission would agree to market stabilisation measures on the one hand while, at the same time, giving credence to a proposal that would, almost certainly, lead to the production of more dairy products in Europe.

“What’s more, this particular viewpoint is held by a significant number of politicians and leading agri opinion formers right across Europe.”