The European Commission (EC) released a dairy farmer support package that includes incentives to reduce milk production, allows European Union (EU) member states to provide aid specific to their producers, and extends the use of intervention stocks to keep surplus dairy products off the market.
The package, released July 18, is estimated to cost €500 million euros (about $553 million in U.S. dollars at current exchange rates), bringing the total designated to stabilize the EU’s dairy economy since last September to about €1 billion.
The measures were presented to the Council of European Union (EU) Agriculture Ministers by Commissioner for Agriculture and Rural Development, Phil Hogan. It contains three main elements:
•A EU-wide scheme to incentivize a voluntary reduction in milk production (€150 million).
• Conditional adjustment aid, defined and implemented at EU member state level (€350 million). Member states will select the type of aid from a menu of options provided by the European Commission, and will be allowed to match EC funding with national funds, potentially doubling the level of support.
EU member states would receive financial grants, taking into account milk production, market prices and the number of small farmers. The member states will have flexibility to define the measure or mix of measures they will make available to farmers, possibly based on production methods, support for small farms, cooperation projects or further production-reduction support measures.
• A range of technical measures to provide flexibility (e.g. on voluntary coupled support), cash-flow relief (e.g. through an increase in the amount of the advances for both direct and area-based rural development payments) and reinforce the safety net instruments by prolonging intervention and private storage aid for skim milk powder until February 2017.
Package specifics will be finalized in the coming weeks, in consultation with EU member state officials.
"Coming at a time of significant budgetary pressures, this package provides a further robust response, and means that the Commission has mobilized more than €1 billion in new money to support hard-pressed farmers,” Hogan said. “Our ultimate goal is to see the much-needed recovery of prices paid to farmers, so that they may make a living from their work and continue to provide safe, high-quality food for citizens, as well as their contribution to rural areas and rural jobs and the provision of public goods."
The announcement comes in addition to a separate package implemented last September, and a range of other measures, including permitting voluntary milk production reduction agreements among milk producers, which was announced in March. PD
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Dave Natzke
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