Ease export ban with superlevy: ICOS
Support for the dairy sector will be discussed at a meeting of agriculture experts in Brussels today, and the Irish co-ops also proposed that fat correction be introduced for this year’s milk, to minimise the huge superlevy threat facing farmers in the last year of EU milk quotas.
However, sources in Brussels have predicted that aid may be limited to the worst affected countries — Finland and the Baltic states, and maybe the Netherlands — and to butter and skim milk powder.
Private storage aid to affected exporters (financial support for warehousing of surplus product) is the most likely solution, as an alternative to selling dairy product at low prices, and disrupting local markets.
ICOS President Bertie O’Leary, representing co-ops, said private storage aid is available to EU decision makers to add stability to the market.
Private storage aid has traditionally been used in the EU, in particular for butter, to take product temporarily off the market, as an alternative to public intervention.
Mr O’Leary also urged the EU Commission to increase all avenues of support to open alternative markets around the world for EU dairy companies.
But he joined the IFA and ICMSA in warning the EU not to use crisis reserve funds, because this is EU agriculture’s own money, taken off farmers’ EU direct payments. “The EU must support the consequences of their own political decisions from elsewhere in the budget.”
“Current superlevy fines taken by the Commission for the 2013/14 quota year should be immediately ring fenced and used specifically to help the current dairy situation.”
He called for consideration of re-introducing export refunds.
Meanwhile, Russia has amended its sanction list to allow in certain products such as lactose-free dairy items.
However, German Chancellor Merkel has threatened to increase EU sanctions on Russia, which could trigger a wider Russian import ban.
Finland is the EU dairy exporter most at risk.
In 2013, it was the top EU exporter of butter to Russia, ahead of France, and had the fourth biggest skim milk shipments from the EU, behind France, Poland and Belgium.
It is also one of the three largest EU cheese exporters to Russia, after the Netherlands and Germany.
Valio, Finland’s biggest dairy processor, says it stands to lose €240m in annual exports.
