The one-off proposal to support farmers willing to reduce their milk production in order to help rebalance the dairy sector has been a significant success, according to the final figures on the take up of the scheme received from the national authorities in each EU country on 30 June.
Some 48,000 dairy farmers took part in the scheme, leading to a total milk production reduction of close to 834,000 tonnes. Out of the original allocated budget of €150 million, close to €112 million was used to compensate farmers for their efforts.
The milk production reduction scheme was announced in July 2016 and ran from the last quarter of 2016 to January 2017. Its aim was to help counterbalance the effects of the dairy sector crisis by reducing the quantity of milk available on the market and thus increase prices for farmers.
To encourage farmers to reduce their milk production, the scheme offered support in the form of 14 euro cents for every kilogramme of milk production that was agreed to be reduced. The financial aid was only paid to the farmers on the basis of the actual reduction in production, after they provided proof of the reduction to their national authority. The difference between the proposed and actual quantities of milk reduced explains the difference in the actual cost of the scheme compared to the allocated budget.
The scheme has also contributed to the effective rebalancing of the EU dairy market as a whole, reflected in the rise of EU milk prices in the last year. The average price in April 2017 was 32.79 c/kg, an increase of 21% compared to the same month a year earlier.