European Agriculture Commissioner Phil Hogan has sought to reassure the farming industry moves to extend dairy intervention to bolster the ailing market will be handled responsibly.
Mr Hogan, who acknowledged the crisis in farming was ’deeper and longer lasting than any of us had anticipated’, briefed EU Agriculture Ministers in Brussels on Monday on the ‘significant progress’ made in implementing support measures agreed last month in Brussels.
This included publication of a new draft regulation on providing for a doubling of the intervention ceilings for skimmed milk powder and butter.
The proposal provoked a mixed response. While it should help stabilise an already over-supplied market during the spring flush by removing large volumes of dairy products, there are always concern intervention risks simply storing up more pain for later when it comes back onto the market.
Commenting in March, Farming Minister George Eustice said: "You end up with more skimmed milk powder in storage which means when you do get a recovery it is much slower.
Mr Hogan urged EU Ministers to ‘approve the proposal swiftly to minimise the period during which it is necessary to apply a tendering system’.
He added: “I want also to reassure you that the Commission is committed to run any tender responsibly and in a way that helps the market and doesn’t depress prices.”
In another measure intended to help the dairy sector, the Commission has activated the implementing regulation allowing milk producers to collectively control milk supply.
It permits agreements between recognised producer organisations, including co-operatives, their associations and recognised inter-branch organisations to plan milk production for a temporary period of six months.
Mr Hogan called on EU Ministers to ‘seize that responsibility with a view to ensuring that this measure is used as an effective contribution towards greater market balance in the dairy sector’.
This measure is unlikely to be adopted in UK.
Meanwhile, the Commission is continuing ‘to make every effort to lift the protectionist ban imposed by Russia on pig products from the EU’, he added.
Mr Hogan said: “Over recent months and in parallel with the WTO procedure, the Commission has made numerous efforts to convince Russia to engage in meaningful technical negotiations for an agreed solution at EU level.
“We also made clear that we are ready to examine any concrete proposal Russia submitted to the EU.
“Even though so far the Russian reaction has not been very positive, the dialogue remains open.”
Mr Hogan updated Ministers on the Commission’s work with the European Investment Bank.
He said: “The Commission is prioritising its engagement with the EIB, with a view to developing appropriate financial instruments to assist farmers and processors to invest in their enterprises to improve the competitiveness of those enterprises or to invest in making any necessary structural adjustments.
Ministers were updated on Monday on the opportunities offered by the European Fund for Strategic Investment for investment in the agricultural sector.
Mr Hogan said: “Member States have been encouraged to look into the possibilities of setting up dedicated platforms for EFSI financing. It is essential that full use is made of all the opportunities on offer.”
He concluded: “This crisis is both deeper and longer lasting than any of us had anticipated.
“We have legislative and budgetary constraints within which we must operate, including the market orientation of the CAP and the functioning of the internal market.
“Within those parameters, I believe the Commission’s response has been swift and robust. We have now essentially deployed all of the instruments available to us.
“I believe that this package of measures, when taken with the full implementation of the September solidarity package, can have a material and positive impact on European agricultural markets.”