Ministers impressed by European Commission aid package proposals

About €400m of the €500m package of measures proposed by the European Commission last Monday will be directed towards dairy farmers.

According to Brussels sources, agriculture ministers were impressed by, and broadly supported the Brussels support package.

It would be funded from superlevy fines rather than a crisis reserve deduction from farmers’ direct payments.

Agriculture Minister Simon Coveney warmly welcomed the aid package announcement by the Commission, but called for immediate clarification on how funds will be distributed state-by-state. He said the announcement addressed most of the points made by Ireland.

The package will be examined by agriculture ministers, who will resume discussions on it at a meeting in Luxembourg on September 15.

Most of the package, about €420m, is targeted aid for each member state, mostly to support its dairy sector. The countries worst affected by dairy market developments — the Baltic States and the newer member states — will get extra funds. Details of the state-by-state breakdown will emerge later.

Another of the measures to help farmers in short term cash flow difficulties is to allow member states pay up to 70% of their direct payments from October 16 (December 1 is the usual earliest date).

Member states can advance the area and animal-related payments for rural development (such as agri-environment, organic farming, disadvantaged areas, animal welfare) by paying up to 85% from October 16.

To address market imbalances, the private storage aid for skimmed milk powder is to be enhanced, and a new private storage scheme launched for pigmeat.

The Commission has proposed to boost spending on food promotion from €81m to €200m by 2019, with higher co-financing rates (from 50 to 70-80%), and a broader list of eligible products to include generic pigmeat promotion on the EU market).

The EU will continue to help exporters by negotiating on barriers to free trade, and encouraging trade to countries where important opportunities are seen for EU agriculture exports.

The Commission has also proposed to tackle supply chain challenges, under headings which include credit for farmers, and financial and risk hedging instruments such as futures markets for agricultural products.

The existing measures to give dairy farmers a stronger position in the supply chain, such as written contracts, collective bargaining, and encouraging producer organisations, stay in place.

The Commission said there is room to increase EU support for milk distributed to schoolchildren (there is no financial ceiling per member state) — and suggested distribution of dairy products to address the nutritional needs of the growing number of refugees in the EU.

The Commission also noted that under certain conditions, member states can carry out food promotions, close production capacity, and rescue and restructure companies in severe financial difficulties.

Member states were advised they have the option to include an income stabilisation tool in their rural development programmes; only a few states are using it so far. States can also include food quality and promotion, measures to boost competitiveness, and protection of local production, in their programmes.


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