European Council modifies Skimmed Milk Powder intervention rules ‘to help the market’

By Jim Cornall contact

- Last updated on GMT

The period for SMP intervention in Europe starts March 1. Pic:©GettyImages/titoOnz
The period for SMP intervention in Europe starts March 1. Pic:©GettyImages/titoOnz

Related tags: Skimmed milk powder, European union

The Council of the European Union has announced a temporary change to the operation of the public intervention mechanism for skimmed milk powder (SMP).

It did so by slightly amending the so-called Fixing regulation, which determines measures on fixing certain aids and refunds related to the common market organization of the markets in agricultural products.

The Council decided to set the quantitative limitation for buying-in skimmed milk powder at a fixed price at zero tonnes for 2018.

According to Rumen Porodzanov, minister of agriculture, food and forestry of the Republic of Bulgaria and president of the Council, it took the action to stabilize dairy markets in 2018.

Porodzanov said it is necessary to keep track of market developments and to make sure that the safety net is used in a timely and prudent manner, not just to react to market disruptions, but also to avoid them in the first place whenever possible.

Pressure on the market

The Council said as a consequence of the difficult situation in the dairy markets, public intervention stocks of SMP in the EU rose to almost 400,000 tonnes in 2017, thereby risking severe pressure on the market, with a negative impact on dairy prices.

In order to avoid a drop in prices and a consequent worsening of farmers' standards of living, the Council decided to forego the automatic buying-in of SMP in a context in which stocks are already very high.

By setting the quantitative limit at zero for 2018, buying-in at a fixed price will not be activated automatically. However, the safety net will still function, as the EU will continue to be able to buy-in SMP through a tendering procedure, and to decide on a case-by-case basis how much to buy and at what price level.

The period during which public intervention is open for SMP starts on March 1 and ends on September 30 every year.