The European Commission has presented a new support package worth € 500 million for European farmers. One main element is the voluntary reduction on milk production.

Most of the money goes to the dairy and pig meat sector which have been in a crisis for some time. The announcement comes in addition to an earlier package, also for €500 million, that was presented last year, and a range of other measures, such as the activation of a clause (Article 222) permitting voluntary agreements among milk producers on planning milk production.

The measures were presented to the July-session of the Council of EU Agriculture Ministers by Vice-President Jyrki Katainen, replacing Commissioner for Agriculture and Rural Development Phil Hogan who was taken ill and is in hospital. The package contains three main elements:

• An EU-wide scheme to incentivize a voluntary reduction in milk production (€150 million) in order to achieve a correction on the supply side of the dairy market. This scheme will operate at EU level so that farmers across the Union have access to it under the same conditions.

• Conditional adjustment aid at Member State level (€350 million that Member States will be allowed to match with national funds, thus potentially doubling the level of support being provided to farmers). With the prolonged crisis showing that some farmers maintain or even increase production in order to maintain cash flow, the Commission intends to provide new funds which can be linked to specific commitments while contributing to secure market stability.

• A range of technical measures to provide flexibility, cash-flow relief through an increase of the advances for support payments and reinforcement of the safety net instruments by prolonging intervention and private storage aid for Skimmed Milk Powder and cheese beyond the end of September. Member States providing voluntary coupled support to the dairy sector (often per cow) will also be granted the possibility to derogate from the obligation to maintain the size of the herd in 2017.

Source: All About Feed, 20 july 2016