EU legislators approve milk fund shake up

By Neil Merrett

- Last updated on GMT

Related tags: Milk

The European Parliament has decided that budget savings worth
€117.3m made to its agricultural subsidy programme back
into helping the dairy industry adapting to ongoing
reforms to the system.

From 1 January next year, a milk fund-restructuring programme will come into place designed to allow producers and processors in the bloc to deal with liberalisation in the market due to Common Agricultural Policy (CAP) reforms. The funding will be generated from savings made by reforming the current 21common market organisations (CMOs) for each food segment and will be a boost for processors in the bloc, who are currently facing unprecedented price hikes for raw materials due to a decline in global milk supply. The savings will be made as part of proposals designed to shake up the European dairy industry by simplifying its management structure. The simplification strategy is outlined in three reports by German politician Elisabeth Jeggle, designed to bring "mini-reform"​ to the milk industry. The changes, which were adopted by Parliament on Wednesday, are expected to be made before a review of CAP, expected next year to assess the feasibility of revoking milk production quotas. Jeggle said that adoption of the measures would provide a soft-landing for the dairy sector by simplifying the management process. The EU-money is expected to be used to beef up the promotion of dairy as part of a nutritious diet, and to help modernise production techniques in mountainous regions. Under the new rules, milk classification will also be liberalised to account for growing consumer demand for lower fat dairy products. The EU had previously allowed for only three categories of milk on the market -- skimmed milk, semi-skimmed and whole milk. The industry, as a result, will be encouraged to develop products outside of these categories, providing that fat content is sufficiently labelled on the packaging. MEPs also voted to adopt a new standard for the formulation of preserved milk by authorising a set protein content for milk powder. The change will bring EU standards in line with the international standard of 34 per cent set by the Codex Alimentarius, putting exports from the bloc on equal footing with rival markets. The protein content previously authorised by European authorities was between 31 per cent and 37 per cent. Changes will also be made to the existing school milk aid rate, to introduce a single simplified scheme. Aid will be raised to €18.15/100kg from the previous rate of €16.11/100kg in a bid to promote balanced nutrition amongst children due to concerns about rising obesity rates in the bloc. Legislators also added they would also move to consider widening the range of products to include healthier, more innovative products. Other amendments included include reducing the skimmed milk powder intervention price by 2.8 per cent to €169.80 per 100 kg. MEPs voted against some of the Commisson's proposed reforms, most notably one that would have abolished private storage aid for cream and skimmed milk powder. This is subsidy for agricultural goods designed to maintain stable supply and demand in the market.

Related topics: Markets, Fresh Milk

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