Just under €14m of this is earmarked for Irish farmers, while they will also be able to benefit from milk powder, cheese, and pigment being taken off the market and put into storage to allow demand to recover.
Agriculture Minister Simon Coveney said he was very pleased with the package, which included most of what he was looking for, but the ICMSA, representing dairy farmers, was not at all enthusiastic.
ICMSA president John Comer said the €13.7m was just 3.6% of the total losses of €380m suffered by dairy farmers this year alone.
“While any additional payment is welcome, the level of funding is minuscule compared to the losses suffered by dairy farmers… and is nowhere near sufficient to address the current downturn in milk prices,” he said.
The ICMSA was particularly scathing of a committee being established to look at the food industry, especially milk, when it said it was obvious the market was dominated by a small number of big buyers who are increasing their margins despite the oversupply of milk.
“To suggest to farmers that establishing ‘high-level groups’ or sharing experiences of unfair trading practices will resolve their problems is simply misleading,” said Mr Comer.
As well as the compensation farmers can expect from the €13.7m fund, they will also receive 70% to 80% of their direct aid funds from the EU early next month, with the balance to be paid out in December.
Mr Hogan said this should help farmers with cash flow problems and payment could be made after the administrative controls have been completed, without the need to complete the on-the-spot checks.
“This derogation is a significant concession, bearing in mind the possible financial risk and is proposed as an absolutely exceptional measure and it is at the absolute limit of the flexibility that the commission can offer in the context of protecting the EU budget,” he said.
Mr Coveney, who is at an informal meeting of EU agriculture ministers in Luxembourg, said: “This will be of major benefit in easing the cash flow of farmers.”
He added that the department will liaise with those concerned to decide how best to use the funds to help both dairy farmers and pig producers who have been hit by the fallout from the Russian ban on EU food imports.
Mr Hogan announced a new private storage scheme for skimmed milk powder and cheese and a new scheme for pigment would take sufficient amounts of the products off the market to allow the price to recover.
To help stabilise the markets, the aid rate for skimmed milk powder is being increased by over 100%, with the storage period fixed for a year. This should keep product off the market long enough for a recovery.
Pig producers have been particularly badly hit by the Russian ban that took vast quantities of lard for which there is not much demand elsewhere. The new storage scheme will be extended to include fresh lard and some of the low-value cuts.
A sum of €30m will be spent on providing milk to refugees in countries neighbouring the EU, and he said he will move quickly on the plan to improve the school fruit and milk schemes.