Search for funds as no end in sight in farm crisis
Farmers across the EU got back €900 million of the reserve over the past two years, but it is now being targeted by some member states for spending to relieve farmers’ financial difficulties, in an agricultural crisis which continues despite the European Commission mobilising more than €1 billion in farmer support measures this year.
At Tuesday’s Council, Germany was among a number of member states raising the possibility of using the Crisis Reserve.
In the Council, most ministers expressed concern at the continued difficulties experienced by European farmers and asked for more decisive intervention.
At their June Council, Ministers will make a thorough evaluation of the measures in place.
The extent of the crisis is reflected primarily in the return of EU “milk lakes”, with more than 190,000 tonnes of skim milk powder (SMP) going into public intervention in 2016.
The volume limit for purchases is likely to be reached in June, although the limit was doubled by the EU only two months ago, in March.
Then, the volume of SMP which can be bought into public intervention at a fixed price was increased from 109,000 to 218,000t.
With the new 218,000t ceiling likely to be reached in June, Ireland’s Michael Creed was among the Agriculture Ministers meeting in Brussels Tuesday who called on the European Commission to again re-examine the volume limit.
Attending his first meeting of the EU Agriculture and Fisheries Council, Mr Creed said “Intervention remains the most effective means available to deal with volatility.
"Demand for it is very high, and I have therefore called on the Commission to provide for a further increase in the volume limit for fixed price intervention for SMP. I think this increase needs to be effected soon, and it should be substantial.
“I have also asked the Commission to give favourable consideration to a higher rate of advance payments in 2016, removal of customs tariffs and anti-dumping duties on the importation of fertilisers and a deferral of superlevy payments, among other measures.”
Ireland has sold only 13,582 tonnes of SMP into intervention since the start of this year. Belgium, Germany, France and Poland have the biggest share of product in public intervention.
The EU also has over 60,000t of butter and 30,000 t of cheese in EU Private Storage Aid Schemes.
But it is SMP stocks that are accelerating fastest, with many EU processors switching to making SMP when the intervention ceiling went up in March.
The product is not in favour on world markets, with its price falling 0.9% in last Tuesday’s GlobalDairyTrade auction.
However, the overall GlobalDairyTrade index rose by 2.6%, to its highest level since January, thanks to a more buoyant market for milk fats.
These prices, however, remain around 15% lower than in September 2015, and more than 50% lower than the prices prevailing in early 2014.
Along with EU storage aid and intervention, dairy markets are being kept afloat by import growth in China, Asia and Latin America, and falling New Zealand and Australian milk production.
Meanwhile, IFA National Dairy Chairman Sean O’Leary has called on Minister Creed to take advantage of the EU’s recent permission to member states to use state aid to provide a temporary repayment suspension of superlevy fines, merchant credit debt, and other cash flow demands.
