Hogan not for turning on intervention price increase

An increase in intervention prices for dairy products will not be proposed by the European Commissioner for Agriculture, Phil Hogan at next week’s key meeting of EU Agriculture Ministers.

A significant number of EU Member States are now calling on the Commission to increase intervention prices which are currently in the region of 21c/L.

Speaking at the European Parliament’s Agriculture Committee this week Hogan said that he has been consistent in his position in relation to an intervention price increase and stressed to MEPs that he is unchanged in his views.

“I am implementing the Common Agricultural Policy that the legislators have agreed for the EU.

“I regard an increase in intervention prices as a fundamental change in the policy direction of the CAP.”

Hogan also said that given that all stakeholders accept that the dairy market is out of balance it must also follow that an increase in the intervention price would do nothing to discourage production in some Member States which have seen a very significant increase in production following the abolition of quotas.

On the contrary, an increase in the intervention price would serve only to provide those Member States and their producers with another outlet for their product.

“Thus potentially encouraging a further increase in production rather than a lowering of production.

“For those reasons, I believe increasing the intervention price is not an appropriate instrument at this stage and I will not be proposing it,” he said.

Hogan did concede that the current intervention volumes ceiling is likely to be breached in April and said that he is positively disposed to increasing the ceilings for intervention volumes.

Over half of the EU public intervention scheme volumes have been filled by Member States in the past eight weeks, the latest figures from the Milk Market Observatory (MMO) shows.

Member States offered 54,522t of Skimmed Milk Powder (SMP) to the measure to date.

Under the intervention scheme, operators in the dairy sector can offer SMP to the measure at fixed prices up to a limit of 109,000t per annum.

Supply regulation

A number of EU Member States have now proposed measures which would limit the production of milk at farm level.

France, being the most high profile, has suggested farmers be paid on a voluntary basis to cut milk supplies.

Commissioner Hogan said that he is prepared to look at some form of supply regulation in the context of any proposals that might emerge at next week’s Council of Ministers.

Hogan said that Commission is looking at a voluntary arrangement which will help to regulate supply but noted that it will have to get approval from European Competition authorities.