The Commission has agreed a Communication that aims to improve the functioning of the food supply chain in Europe.
The recent sharp decline in agricultural commodity prices alongside
persistently high consumer food prices has raised concerns on the efficiency
of this crucial sector of the European economy. Improving commercial
relationships between actors of the chain will be a significant step towards
a more efficient food supply chain ultimately benefiting all actors of the
chain and consumers alike.
The European Commission today agreed to allow Member States to pay farmers a one-off payment of up to EUR 15,000 in state aid. The move forms part of the Commission's ongoing efforts to stabilise incomes for dairy farmers, but is of course open to farmers in all sectors. The decision amends the Temporary Crisis Framework, adopted by the Commission in January 2009, which already provides for various aid possibilities to facilitate access to finance for EU undertakings. With today's Commission decision a separate compatible limited amount of aid of EUR 15,000 for farmers is included into the Framework. This amount can be granted once per undertaking until the end of 2010. Any de-minimis aid already received since the beginning of 2008 has to be deducted from this amount. Aid schemes put in place under this new instrument will have to be open to all primary producers and will have to complement other general crisis measures already put in place by a Member State. The idea of allowing farmers state aid of up to EUR 15,000 formed part of the Commission's Communication on the milk sector of 22 July 2009.
Questions and answers on the Commission's amendment of the Temporary
Crisis Framework [pdf]
The Rural Development Committee approved a first wave of proposals from Member States/regions for using fresh European Union funding for rural development. The Member States/regions in question have proposed amendments to their Rural Development Programmes (RDPs) to make use of extra funding provided by the Health Check of the Common Agricultural Policy and the European Economic Recovery Plan (EERP), agreed in November 2008. The extra funding in question totals
EUR 4.4 billion for the EU as a whole and must be spent through RDPs in the period 2009 to 2013. Member States/regions choose the priorities on which to spend their funding from a list which includes climate change, restructuring of the dairy sector and broadband for rural areas.
European Union agriculture ministers yesterday approved the Commission's
proposal to extend the period for buying butter and skimmed milk powder into
public intervention storage. This forms the latest part of the Commission's
ongoing efforts to stabilise milk prices for dairy farmers.
Normally, intervention buying is limited to 30,000 tonnes of butter and 109,000 tonnes of SMP and is only open between 1 March and 31 August each year. The Commission has already bought butter and SMP well beyond these limits (so far, 83,000 tonnes of butter and 283,000 tonnes of SMP).
Now the Council agreed to extend the period for intervention until the end of February 2010 when the new intervention period begins. Purchases beyond the normal limits are carried out through a tendering procedure.
To make the School Milk Scheme more attractive, the Commission has
extended the range of dairy products eligible for aid. To achieve this, the
minimum milk content for fermented products with fruit has been reduced from
80% to 75%, which makes it possible to add more of other products. The same
provision was extended to non-fermented milk products. These changes will
allow products like fruit yoghurts and milk drinks with fruit juice to fall
under the scope of the scheme. The changes are part of the series of
measures proposed in July to help stabilise the dairy market. In July 2008,
the School Milk Scheme was already adapted, making it simpler, extending it
to secondary schools and increasing the product coverage.
Levies for Member States which exceeded their milk quotas come to just
over EUR 99 million for the 2008/2009 marketing year, according to a
provisional calculation by the European Commission, based on Member States'
annual declarations. Last year the total levy amounted to EUR 340 million.
Five Member States (Austria, Cyprus, Italy, Luxembourg, and the Netherlands)
exceeded their deliveries quotas. Altogether these account for an overrun of
348,400 tonnes, resulting in a levy of EUR 97 million. Italy exceeded its
deliveries quota by 1.5%, the Netherlands exceeded by 1.4% and Austria by
1.2%. For quotas for direct sales to consumers, Italy and the Netherlands
reported overruns totalling 7,500 tonnes, resulting in a levy on direct
sales of EUR 2.1 million. Total EU milk production in the 2008/2009 quota year
(April-March) was 4.2 percent below quota.
The High Level Experts' Group on Milk met for the first time in Brussels
on Tuesday 13 October, holding constructive discussions on contractual
relations and bargaining power in the dairy market. The HLG was established
by the European Commission to look into the medium and long-term future of
the dairy sector, particularly in view of the phase-out of milk quotas,
which will be concluded in April 2015. Its work runs in parallel to the
measures the Commission is introducing to stabilise the dairy market in the
short term. The HLG is chaired by Jean-Luc Demarty, the Commission's
Director-General for Agriculture and Rural Development and Member States are
represented by senior officials. Further meetings are scheduled to take
place once a month, and the HLG will issue its final report by the end of
The European Commission today proposed two changes to the rules governing
the dairy sector as part of its continuing efforts to stabilise the milk
market. Firstly, and as announced last month by Mariann Fischer Boel,
Commissioner for Agriculture and Rural Development, it is proposed that the
dairy sector should in future be covered by a disturbance clause which
already exists for other farm sectors, to allow a quicker response to future
market disturbances. Secondly, for the 2009/2010 and 2010/2011 quota years,
changes to the operation of quota buying-up schemes by Member States will
ensure that bought up quota which is kept in the national reserve should no
longer count as part of the national quota when it comes to deciding whether
superlevy is due for exceeding the quota. If superlevy is then collected,
the part corresponding to the bought-up quota can be used by Member States
for restructuring of the sector. These proposals will be discussed by EU
agriculture ministers on 19 October. Later this month, the Commission will
formally adopt changes to state aid rules to allow Member States to pay
farmers up to EUR 15,000 each in national aid before the end of 2010.
Blog entry: "Abracadabra! Where did the money go?" (29/10/2009)
Blog entry: "Greatly Mixed-up Objectives" (23/10/2009)
"Latest Information on the Dairy Market" (Session of the Agriculture Committee of the European Parliament, Strasbourg, 19/10/2009)
"Dairy market situation" (Speaking notes at the Agriculture Council of Ministers, Luxembourg, 19/10/2009)
"GMOs: letting the voice of science speak" (Policy Dialogue at "European Policy Centre", Brussels, 15/10/2009)
"Doing things for ourselves" [pdf] (Inaugural award of "Innovation Prize for Women Farmers", Brussels, 15/10/2009)
"Making a virtue of quality" (IV European Forum on Food Quality, Brussels, 08/10/2009)
Blog entry: "Risky business" (07/10/2009)
"The future of sheep production in Europe" (Sheepmeat Forum for Producers and Industry, Brussels, 07/10/2009)
Opening remarks (Informal Agriculture ministers' gathering on milk,
"Quarterly Report on the Dairy Market" (October 2009) [pdf]
October 2009 update on recent agricultural commodity and food price developments in the EU [pdf]
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