Sources of finance, such as the dairy superlevy fines for 2014/15 and the annual mapping penalties, could be used to fund a support package for Europe’s dairy sector, according to ICOS’ European Affairs’ Executive Conor Mulvihil.
“Up to the very recent past we had been told by the European Commission that fines paid by farmers, or on behalf of farmers by member state government, are brought back into a central pool and then lost to agriculture.
“But there is now evidence to indicate that €400m of the 2014 super levy fines were brought back into the EU agriculture budget. So there is no reason why this cannot be replicated with the €850m that will be lifted courtesy of the super levy monies that will be lifted for 2015.
“And there is no reason to prevent this principle being extended to the significant mapping fines, paid by many EU member states.”
Mulvihil believes that the recycling of fines paid by agriculture takes the pressure of the EU’s Crisis Fund as a source of additional aid for the dairy industry.
“The use of the Crisis Fund raises the prospect of a modulation tax being applied to the Basic Payment received by farmers,” he said.
“Phil Hogan addressed a press conference in Brussels on Wednesday of this week at which he said that superlevy funds cannot be put into a dairy fund.
“But the commissioner did confirm that, indirectly, some of this money will help to fund the agriculture sector. It will also help him get short term measures through the college of commissioners.”
Muhilvihil confirmed that Phil Hogan will announce a series of support measures for the dairy sector on September 7.
“There is a growing belief that he will commit to a review of the intervention arrangements,” he said.
“But that will take months to complete. Additional steps may well include targeted measures for worst hit countries like the Baltics. The Commissioner will also focus on finding new markets and developing free trade agreements like with Japan.”