SUPPORT to help the European dairy sector through the current crisis is already bearing fruit.
The EU’s agriculture and rural development commissioner Mariann Fischer Boel made this clear on her internet blog when commenting her proposals last week to speed up the recovery.
Ms Fischer Boel said in good times and bad, EU dairy farmers get valuable support from the system of direct payments.
“Worth about €40 billion a year, this system includes €5bn paid out annually as compensation to dairy farmers for cuts to intervention prices, under the 2003 CAP reform.”
This year, 70% of direct payments can be made as early as October 16, instead of December 1.
The EU expect to spend an extra €600 million on market instruments such as public intervention, aid for private storage and export refunds.
Rural development policy, now worth more than €14bn a year, offers a list of measures that national governments can use to make the dairy sector more competitive.
“In view of all this, it defies belief that some people accuse the EU of ‘doing nothing’ for the dairy sector. To say things like this is not just to be short-sighted. It is to deliberately turn one’s back on facts which are staring everyone in the face,” she said
Ms Fischer Boel said the market has started moving the right way. In one month, EU butter prices have risen by 10%.
Prices for cheese and skimmed-milk powder are also moving upwards, as is the average EU milk price.
Requests to sell products into temporary public storage for public money through intervention have practically come to a halt.
Ms Fischer Boel re-iterated that the quota system will go in 2015 because it is not the true friend that some people claim. When the EU set it up in 1984, it was intended to be temporary.
“As it somehow escaped abolition year after year, it held back the dairy sector’s competitiveness.
“It kept an arm tied behind our backs so that New Zealand pushed us aside to become the leading global exporter of dairy products.
“It put up barriers to young farmers keen to enter the sector. And it didn’t prevent a loss of labour. Since 1984, the first 10 countries to join the EU have lost 80 % of their dairy producers.”
Ms Fischer Boel said further action is coming. In the short term, member states can offer farmers up to €15,000 in state aid.
“At the same time, we need to put on our thinking-caps and look at some longer-term issues.”
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