Possible intervention price rise to be discussed in Europe on Friday
The possibility of raising the intervention price on a temporary basis will be discussed on Friday.
Announcing the details of Europe’s €500m package of supports for farmers, the President of the Agriculture Council, the Luxembourg Minister Fernand Etgen said the measure had been raised by some Member States.
He also said it would be discussed at the Special Agriculture Committee meeting on Friday and again on Tuesday.
However, earlier today, Jyrki Katainen, Vice-President of the Council of Agriculture Ministers said raising intervention pricing is not an appropriate measure to deal with the current dairy issues.
Speaking at the extraordinary Council of Agriculture Ministers meeting today (Monday) he said raising intervention is not an appropriate measure to deal with current dairy issues.
“I would also want to say something about the idea that the price for public intervention should be increased. We owe it to farmers to make it clear that this is not the appropriate policy response to the current situation,” said Katainen.
He added in terms of the clear market orientation of the CAP, the Commission does not believe that increasing the price for public intervention is consistent with that approach.
“And market orientation is a necessary foundation of our policy, to secure the future of European farmers. Moreover, we don’t believe that it would solve the current market problem,” said the Vice-President.
According to Katainen increasing intervention price during a time of major market imbalance will not improve the situation for dairy farmers but it would in fact create an artificial outlet for EU dairy products.
“At a time when there is a clear market imbalance, increasing the price paid for public intervention will do nothing to restore market balance but would instead create an artificial outlet for EU dairy products.”
It would weigh on the EU competitiveness for the 10% (or more) of EU milk production that need to be exported.
According to Katainen, the very existence of EU public stocks would simply push market prices down further, thus deepening and prolonging the current difficult situation.
He added that introducing EU public stocks would also remove the incentive for a cautious approach on the supply side in times of market turbulences.