European Commission proposes changes to governing dairy sector

THE European Commission has proposed two changes to the rules governing the dairy sector as part of its continuing efforts to stabilise the milk market.

It is proposed that the sector should in future be covered by a disturbance clause which already exists for other farm sectors, to allow a quicker response to future market disturbances.

Changes to the operation of quota buying-up schemes by member states for the 2009/2010 and 2010/2011 quota years are also proposed.

The commission said this will ensure that bought up quota, which is kept in the national reserve, should no longer count as part of the national quota when it comes to deciding whether super levy is due for exceeding the quota.

If super levy is then collected, the part corresponding to the bought-up quota can be used by member states for restructuring of the sector.

These proposals will be discussed by EU agriculture ministers next Monday. Later this month, the commission will formally adopt changes to state aid rules to allow member states to pay farmers up to €15,000 each in national aid before the end of 2010.

Commissioner Mariann Fischer Boel said these proposals show once again the EU’s commitment to helping dairy farmers.

“The wide range of measures we have already taken are having a positive effect and the latest proposals will help in the longer-term,” she said.

Meanwhile, the first meeting of the EU High Level Group on the long-term future of the dairy industry will take place today, while ministers are expected vote on commission plans to extend the intervention period at their meeting on Monday.

The commission said the most recent data show that prices are improving not only for all dairy commodities but also for raw milk at the farm gate.

It said it expects to spend up to €600 million on market measures this year. Some 70% of direct payments may also be paid six weeks earlier than usual from this Friday.

The commission is also preparing a report into the supply chain in the dairy sector, to increase transparency and ascertain whether there are any problems of competition. This will be published before the year end and will be discussed by the High Level Group.

Padraig Walshe, president of the European farmers union, COPA, and of the IFA, has urged EU politicians to urgently agree on strong market measures especially in public intervention and in export refunds on dairy produce, at Monday’s meeting to help solve the crisis in the dairy industry.