Policy instruments for the dairy sector
The EU's dairy policy dates from the 1960s. It helps to create stable market conditions for EU milk producers and processors. The policy has been continuously updated.
The milk sector is integrated into the Common Organisation of the Markets in agricultural products (Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products) where the main market tools are set:
- market intervention,
- rules concerning marketing and production,
- trade with third countries.
The milk quota regime which had been introduced in 1984 in order to address problems of surplus production expired on 1 April 2015.
Public intervention and private storage
Some market tools are available in the dairy sector, which work as a safety net in case of serious imbalance in the market.
One of these market tools is the buying-in of butter and skimmed milk powder (SMP) into public stocks – known as "public intervention".
Another optional market tool is the granting of a financial support (aid) for private storage for butter, SMP and cheese with Protected Designation of Origin (PDO)/Protected Geographical Indication (PDI). This aid can help operators to take products temporarily off the market, as an alternative to "public intervention".
Intervention agencies - paying agencies
These agencies are responsible for managing and ensuring control of the operations linked to intervention measures relating to public storage in the milk and milk products sector.
>> List of paying agencies [195 KB]
Special intervention measures
Specific ad-hoc measures are also available to be mobilised in case of emergency or significant disturbances. Export refunds can be used in cases of market imbalances.
- Measures against market disturbance
- Measures concerning animal diseases and loss of consumer confidence
- Measures during periods of severe market imbalance.
Aid is paid for the supply of milk products to pupils under the so-called School Milk Scheme. The Union aid – which is limited to a maximum of 0.25 litre of milk equivalent per pupil and per day - can be supplemented by National Aid.
Foodstuffs intended for human consumption must comply with explicit marketing standards to be marketed in the EU as milk and milk products or spreadable fats (Article 78 of Regulation 1308/2013).
Definitions, designations and sales description for:
>> milk and milk products [44 KB]
>> drinking milk [45 KB]
>> spreadable fats [81 KB]
A major amendment to the single CMO regulation, known as the Milk Package, was adopted in 2012.
The package deals with contractual relations in the milk sector and provides for written contracts between milk producers and processors and for the possibility for farmers to negotiate contract terms (including price) collectively via producer organizations.
It also sets out specific EU rules for inter-branch organizations, facilitating actors in the dairy supply chain to dialogue and carry out certain activities.
The package also entails measures enhancing transparency in the market and possibilities for the supply management of cheese covered by Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI) under specific conditions.
Trade with third countries
An import regime applies to the entry of dairy products into the EU. Preferential imports are subject to the issuing of an import license and, in general, payment of an import duty (tariff). Several trade agreements, multilateral and bilateral, have resulted in preferential import at reduced or 0 duty, mostly in the form of import quotas.
The EU is a major player for exports of dairy products worldwide and is the first exporter for cheeses. Since 2009, exports are carried out without the granting of export refunds. According to the new policy (Regulation 1308/2013) export refunds are considered as an exceptional market instrument only to be considered in crisis situations. Exports of dairy products with export refunds, as well as exports in the framework of certain quotas opened by third countries are subject to the issuing of an export licence.
EU promotion programmes relating to the dairy sector
In the latest wave of EU Promotion Programmes published on 21 April 2015 there are six new information and promotion programmes for the dairy sector.
All six are targeting third country markets - worth nearly € 12.2 million from the EU budget over three years (details in this table [189 KB] ).
As they are 50 % co-funded by public or private funds, the total investment through these programmes will be nearly € 24.4 million.
Most of these programmes will start in the middle of 2015.
These new programmes come in addition to 14 ongoing multi-annual programmes for the dairy sector which were launched between 2011 and 2014 – four in 2011, three in 2012, six in 2013 and one in 2014.
Nine of these ongoing programmes target third countries (worth just under € 31 million total budget – half of which is EU-funded).
The five others target the internal market for a total amount of € 26.4 million (also 50 % EU-funded) – including a "multi country" programme in seven Member States worth € 16 million.
Altogether the 20 new or ongoing promotion programmes for the dairy sector are worth € 82 million of which 50 % are EU-funded.
The dairy sector also benefits from direct aid and rural development programmes. It is covered by the EU quality policy and has to comply with a number of constraints and rules, notably related to public and animal health.