Brussels (Belgium) ‒ At the meeting of European Agricultural Ministers on July 18th the European Commission presented a new package of emergency measures to help European dairy farmers who have been suffering for the last two years from collapsing market prices.
According to Farm Europe the actual impact of this new package will largely depend on the way the Commission implements the new measure to intensify a voluntarily reduction in production, and in particular on the level that it sets for aid per tonne withdrawn from production.
At the meeting of European Agricultural Ministers Commissioner Phil Hogan presented a new package of measures to help the dairy sector to recover from the deepening crisis that has been engulfing it for almost two years now.
The measures recognise that recovery depends on re-balancing the European market, which in turn depends on reducing production. “We as Farm Europe agree with Commissioner Hogan that the “continuing increase in production … is simply not sustainable in the current market conditions”. This analysis is in line with the view defended by Farm Europe since 2015 and with the measures we have put forward in recent months”, states Yves Madre of Farm Europe.
The package presented by the Commission to the Council consists of:
- a plan to encourage a voluntary reduction in European milk production.
- conditional adjustment aid, distributed in national allocations, calculated using the allocation method used by the Commission last autumn.
The success of the Commission’s action will according to Farm Europe depend on the rate of aid that the European Commission decides to provide per tonne withdrawn from production. “To have a real impact the rate must offer a credible incentive, one that, in particular, persuades the most competitive producers to voluntarily reduce their production. The aid must therefore be set above their marginal cost of production for a litre of milk”.
Moreover, the effectiveness of the entire recovery package will depend on the conditional adjustment aid being fully consistent with the objective of reducing production, says Farm Europe.