Ministers debate milk, wine and sugar reforms

By Neil Merrett

- Last updated on GMT

Related tags: Eu, Milk, European union

Food safety and animal health top the agenda at
today's meeting of EU's agricultural ministers, with
the future of milk, wine and sugar production also up for
discussion.

The meeting, which may be extended into tomorrow, is being held as the European Commision continues to drive Common Agricultural Policy (CAP) reforms designed to improve competitiveness of the EU's food and beverage production against global competitors. These reforms are particularly focused on the current 21 common market organisations (CMOs) for each food segment. This could be vital for processors in the bloc, who are currently facing unprecedented price hikes for raw materials like milk and cereals due to a declining global supply. The discussion on animal safety follows recent outbreaks of diseases like avian influenza and foot and mouth in the bloc, which continues to adversely affect dairy and meat exports. Opinions on changes made throughout agricultural production, both in terms of market support and quality standards, will then follow with a debate on three applications for genetically modified (GM) maize. Among the pressing agricultural issues facing manufacturers and farmers in the bloc, the so-called adoption of "mini milk package"​ reforms designed to simplify management of dairy production will be discussed. Under the new rules, milk classification will 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. Changes will also be made to the existing school milk aid rate, to introduce a single simplified scheme. Aid for school milk programmes 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. Other amendments include reducing the skimmed milk powder intervention price by 2.8 per cent to €169.80 per 100 kg. Similarly, wine production will be another key area for debate following the latest proposals to shake up the industry through better use of the €1.3bn budget allotted to the industry. The new measures, which are already proving controversial, aim to reduce the bloc's 1.5bn-litre 'wine lake' through a number of reforms regarding supply, formulation and marketing. Despite a global increase in demand for greater quality products, consumption of EU​ wines is currently falling. As a result, imports to the bloc have increased over the last decade by 10 per cent, while exports have grown far slower, according to EU figures. It is hoped the abolition of such measures will end the practice in the EU of paying nearly half the annual wine budget, €500m, to distil wines that won't sell into undrinkable, industrial alcohol. The EU will also offer incentives for producers wishing to leave the industry to dig up vineyards to reduce overproduction as part of a process known as grubbing-up. An initial budget of €430m will be set aside for the first year to encourage producers to dig up unproductive vineyards at a rate of €7,174 per hectare removed. By the fifth and final year, the budget will be reduced to €59m, with producers receiving about €2,938 for each hectare. This practice could be limited within member states for certain vineyards on mountains and steep slopes, where there may be concern for the environment. All-in-all the EU hopes through grubbing up to reduce the amount of vineyards in the bloc by about 200,000 hectares. The scheme will be backed by a rural development plan that would create a funding scheme to set up young farmers, while also providing help with marketing and vocational training. In terms of quality, the use of sugar to enrich wines would be prohibited under the new rules, while the EU will also retain bans on imports of musts for vinification and blending EU wines with foreign brands. The EU will also grant a budget of €120m to co-finance to promote the bloc's wines outside of the EU, to increase international market share. Funding would also be set aside for agri-environmental schemes to improve the industry's environmental impact. As of 7 May this year, amendments to sugar production have been in place to reduce output in the bloc in a drive for greater profitability. This focus includes fixing aid payments at 10 per cent, while granting further funding for producers that renounce their own quotas. According to the Commission, the changes should allow for further renunciation of 3.8m tonne of the sugar quota, on top of the 2.2m tonnes already made. In terms of cereals production, plans to boost lagging intervention stocks by removing the set aside rate that requires farmers to leave 10 per cent of their land unsown to ensure land sustainability, will come under consideration. The move is expected to boost crop output by 10m tonnes, though farmers which voluntarily wish to maintain a set-aside rate will be allowed to do so. The Commision will also rule on allowing three genetically modified maize products onto the EU market. These will include the varieties 59122 (Herculex), 1507xNK603 and NK603xMON810. If adopted the products would be allowed for use in everything but cultivation. Despite continued concerns in the bloc over sustainable fish stocks, the commission said that no fisheries points were on the agenda for today.

Related topics: Markets, Fresh Milk

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