The precise details of the € 500 million aid package* for the dairy and other livestock sectors announced by Commissioner Phil Hogan in July have been finalised this week in agreement with Member State experts, and will be published in the Official Journal in the coming weeks. The most significant elements in this package are a € 350 million support package (with allocations already previously set for Member States), a new EU-wide € 150 million aid for milk production reduction, and extending public intervention as well as private storage aid for Skimmed Milk Powder (SMP) until the end of February next year.
Speaking today, Commissioner Phil Hogan said: "I am particularly pleased with the aid scheme for reducing milk production as it provides a genuinely European response to a problem on the EU market. I am confident that this measure will contribute significantly to improving market sentiment and will be reflected in improved prices for European dairy producers."
For the € 350 million support package, the rules confirm the menu of options available to Member States in how they decide to allocate funds, including conditions relating to eligibility and ensuring that the support reaches farmers engaging in activities of a market stabilisation and economic sustainability nature.
The € 150 million scheme is a new policy response to the market situation, and therefore much of the discussion since July has been centred around finalising the details. The key point is that it will be an EU-wide scheme, so that it will be up to each individual dairy farmer to decide whether he/she wants to participate – with the prospect of a payment for reducing production in the period from October-December, relative to the same period last year. While the basic concept has not changed since July, this week's meeting has clarified/finalised many of the technical elements, such as: minimum claim (1 500 kg); maximum claim (50% of production in the reference period); penalties for failing to reduce production for the full amount offered; the various deadlines, and the relevant administrative and control rules. The scheme will be run as a "simultaneous examination", meaning that the Commission will accept all bids notified by the relevant Member States by the agreed deadline – unless the claims exceed the volume (1.07 million tonnes) corresponding to the available budget, in which case a reduction coefficient will be applied. Further periods (for November-January, December-February, and January-March) will follow until the budget volume is reached. Once the period is over, farmers will then have 45 days to provide the proof that they have reduced production – following which the aid can be paid.
* The package comprises 3 Delegated regulations (the € 350 million aid package; the € 150 million milk production reduction scheme; and the extension of public intervention for SMP); and 4 more technical Implementing regulations - backed by Member States - relating to Voluntary Coupled Support, higher advances on CAP Payments, 6 month extension of the mobilisation of Article 222 for milk production planning, and the extension of Private Storage Aid for SMP.