How EU member states can help dairy farmers

NUMEROUS ways that member states can help dairy farmers were described in the European Commission’s latest analysis of the sector.

Member states can spend up to 10% of the single farm payment on restructuring or development – in addition to the €5 billion a year (worth around 3.5c/litre) decoupled direct payment, which is the EU’s main policy tool since 2003 for supporting dairy farmers’ incomes.

“Dairy restructuring” has also been identified as one of the areas for which €4.2 billion has been allocated in the health check and recovery package.

Options under rural development include investment support (for example to improve efficiency of milk production or animal welfare), disadvantaged area payments, support for environmentally friendly dairy production (for example, organic production, reduced fertiliser use or mountain pasture management), animal welfare support such as grazing premiums, support for diversification such as on-farm shops or renewable energy, and farmer early retirement schemes.

The EU’s temporary crisis framework for state aid during the recession offers up to €500,000 per company. For farmers, €15,000 could be an appropriate limit, suggested commission officials. This aid would benefit all producers, not just dairy. Member states can establish specific aids for vulnerable areas or vulnerable types of farming in the dairy sector and can grant small amounts of state aid or loans to help milk producers with liquidity problems. IFA national dairy committee chairman Richard Kennedy said farmers will judge the commission’s report by its impact on milk prices.