Commissioner Phil Hogan today welcomed the news that the €150 million Milk Production Reduction Scheme, which he announced in July, has been almost fully subscribed (98.9 %), with applications made offering to reduce production in the final quarter of 2016 by 1.06 million tonnes (of the 1.07 million tonnes available).
The Commissioner said that today's figures showed that "the scheme has proven to be both very attractive and successful. It fully meets our expectations. I am confident that this measure, allied to others included in the July and earlier packages, will contribute further to an already stabilising market situation in the European dairy market. I am particularly pleased at the level of participation among the main dairy producing Member States." The Commissioner noted that signs of recovery are already evident, particularly in certain commodity prices, but reiterated that his objective was to see "improving market sentiment translated into higher farm-gate prices to the benefit of producers."
The notifications received by the Commission show that over 52 000 dairy farmers in 27 Member States have applied to participate in the scheme, with offers to reduce production in the final quarter of 2016, relative to the same period last year. The volume reductions offered vary from producer to producer, but average 20 tonnes per applicant. In terms of production, this represents an average reduction of 16.5 per cent, which is a 2.9 per cent reduction in total milk deliveries in the final quarter of 2016.
At the end of the three-month period, farmers will have 45 days (to approx. mid-February) to provide proof that they have reduced production and, therefore, confirm eligibility for the aid payment of €14 per 100kg of "reduction".
The national take-up also varies considerably, with total volume reductions ranging from 286 000 tonnes in Germany and over 100 000 tonnes in France and the UK to less than 1 000 tonnes in Malta and Cyprus. The largest number of participating dairy farmers are in France (13 000), Germany (10 000), Ireland (4 500) and Austria and the Netherlands (both 4 000). In percentage participation rates, Ireland has a participation rate of 24 %, followed by Belgium and the Netherlands (both 22 %), France (19 %) and Portugal (17 %).
Because the overall volume offered was marginally less than that available, there will be a second round for the remaining 1.1 per cent (some 12 000 tonnes) for the period November 2016 to January 2017. This second round will be open only to those who did not apply for participation in the first round. The deadline for the receipt of complete applications for the second round is 12 October 2016.
This Milk Production Reduction Scheme was announced by Commissioner Hogan at the July Agriculture Council as part of a €500 million aid package for the dairy sector, which included an emergency support package worth €350 million with designated envelopes for each Member State, and a number of market measures.
Annex: Notifications under Aid scheme for milk production reduction (updated) (Reg 2016/1612 Article 3)