EU gives €500m in aid, dairy producers encouraged to reduce output

Copa and Cogeca Secretary-General, Pekka Pesonen, said the measures could help solve the unprecedented crisis hitting EU agricultural markets.

The package, unveiled yesterday, includes aid worth $150m to give incentives at EU level to EU dairy producers to reduce on a voluntary basis their production.

That move followed a recent meeting of the Milk Market Observatory (MMO) Economic Board​​ concluding that a correction on the support side of the dairy market was still necessary. 

The deal also sees €350m in targeted support for EU milk and livestock farmers. 

Hogan said: "Coming at a time of significant budgetary pressures, this package provides a further robust response, and means that the Commission has mobilized more than €1bn in new money to support hard-pressed farmers.”​

He said the precise details of all the different measures will be finalized in the coming weeks.

The Commission said it also intends to extend the period for public intervention and for private storage for skimmed milk powder (SMP) beyond the end of September. 

The package is in addition to a separate EU aid measures worth €500m announced last autumn.

Member states can use part of €350m EU farm aid package to assist sectors other than dairying, including grain sector @Europarl_EN

— Mairead McGuinness (@MaireadMcGMEP) 19 July 2016

Feed sector solidarity

Ruud Tijssens president of the EU feed manufacturers’ federation (FEFAC), writing in the trade body’s annual report​​, which was released yesterday, said the feed sector expresses its solidarity with all livestock farmers who are being pushed to the edge in the crisis.

“It has been an extraordinarily challenging year for our customers. It is no secret that the economic squeeze is also felt by the feed industry, being the main supplier. ​

“Prices of pig meat suffered because of oversupply caused by the continued Russian political embargo, while dairy farmers were faced with an additional economic dimension due to the lifting of the milk quotas,” ​he noted.

And Tijssens stressed FEFAC has, on numerous occasions, urged the Commission to take action and remove non-tariff trade barriers that jeopardize access to competitively-priced feed supplies.  He said such a move would also help ease the pressure on EU livestock producers. 

Non trade barriers can include the lack of a workable low level presence threshold for the adventitious presence of traces of non-authorized GM traits in GM crop imports.

"Feed and food safety are of course non-negotiable elements in EU legislation, but the EU should stick to science-based standards that will not unnecessarily put EU feed manufacturers at a competitive disadvantage vis-à-vis third country operators,"​ he told us.

GM 'opt-out' proposal

He also noted that, despite the European Parliament rejection of the ‘opt-out’ proposal​​ for EU approved GMO food and feed events, the Commission has kept it on the table. 

The proposal remains at Council level where unanimity is needed to reject it, and Brussels based sources report that, for the moment, not all countries are willing to get rid of it. 

Tijssens warned this means that “disruption of the common market is still a potential outcome.”​

FEFAC, along with the EU cereal grains and oilseeds lobby, COCERAL and FEDIOL, estimated that if proposal is enforced, there could be a 10% increase in feed costs for EU livestock farmers in opt-out countries where GM soy would need to be replaced with non-GMO soy.

“We have repeatedly stated that there is no need for this proposal as the feed industry already provides solutions to fulfil the demand for non-GMO feed through segregated supply chains,”​ added Tijssens.

And he again criticized the Commission’s delay in making a decision on GM food and feed import approvals, given that, in January this year, the EU Ombudsman already found the EU executive to have committed unjustified maladministration by not complying with the legal timescale requirements on GM authorization. 

“It is of crucial importance that the EU feed and livestock sector remain competitive and continue to have access to global feed supplies to maintain market predictability as the basis for our livestock farmers so they can capture their fair share in very dynamic global markets for animal products,”​ said the FEFAC president.

Meanwhile, EU sources said three long awaited approvals - for GM traits MON87705 x MON89788, MON87708 x MON89788 and FG72 - are to be processed this Friday.