Dairy sector in cautious backing for EU aid

By Jane Byrne

- Last updated on GMT

Related tags: Dairy farmers, Milk, European union, Powdered milk

A fund to help bolster the European dairy sector has been welcomed by the industry but the European Dairy Association (EDA) warns it must be spent appropriately.

EU dairy farmers will receive €280m (£255m) in aid, confirmed EU agriculture commissioner Mariann Fischer Boel; the move follows the hard lobbying by farmers in recent weeks for additional support measures to cope with plummeting milk producer prices.

Boel was addressing Ministers at the Agriculture Council today. She said that no decision had as yet been made as to how the fund would be allocated, and that it remains subject to approval from the EU’s Council of Finance Ministers; however, she added that the measures should benefit dairy farmers directly.

The aid will be drawn from the bloc's 2010 budget.

Future proofing

Joop Kleibeuker, secretary general of the EDA, told DairyReporter.com that it was difficult to comment on the efficacy of the funding package as it was still unclear exactly how the money would be used:

“The EDA hopes that the proposed €280m in support measures, when communicated more concretely by the Commission, will serve to strengthen dairy farmers’ position to operate in future markets.”

World demand for dairy products has fallen over the past year and increased international competition from countries like New Zealand is eating into the European share of the world dairy market.

Quota rules

A temporary adjustment to the quota management is also on the cards, announced Boel.

The Commissioner also reiterated that the proposal to allow for a temporary state aid of €15,000 per farmer is due to be formally adopted by the Commission on October 28.

Frustration

The move followed the dumping of three million litres (660,000 gallons) of milk on fields last month by protesting Belgian farmers.

French and German dairy farmers have also shown their frustration over low prices for their produce by blocking deliveries and also dumping milk. Meanwhile, farmers kept up the momentum of their recent campaign with a gathering in Luxembourg as the EU farm ministers were meeting in the city.

The EU has previously announced plans to phase out milk quotas by 2015 and to limit market intervention that backs prices, with a view to eliminating it in the long term; moreover, the Commission plans to extend EU special purchases of butter and skimmed milk powder to February next year.

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