The EU Commission will unveil a raft of measures aimed at supporting European dairy farmers at a meeting next week.

EU Agriculture Commissioner Phil Hogan will roll out details of the support package on Monday 18 July aimed at giving further supports to dairy farmers and is the follow-on to the €500m support package announced last September. Informed sources in Brussels suggest that reports of this budget also being worth €500m are “wide of the mark”.

While details are being ironed out, the biggest stumbling block for those in Europe is how exactly it will be funded. Unspent funds in the Brussels coffers are being soaked up by the ongoing and deepening migrant crisis, meaning that new funding will have to be sourced to support dairy farmers.

What is becoming clearer is that the payments of other farmers will not be raided to fund the new dairy package through a crisis reserve.

Commissioner Hogan has stated that he will not reintroduce a quota system but acknowledged that the future of the continent’s dairy farmers needs to be preserved.

The support package is almost certainly going to be made available only to dairy farmers who agree to limit or cut supply of milk. These are the key details which will be announced next week but as the Irish Farmers Journal previously revealed, incentives to fund the culling of cows will not be considered as this could depress the beef trade.

Initiatives around breeding programmes and the limiting of feeding are being encouraged by many in the sector as ways of reducing supply. However, milk supply in Ireland and Europe has been dropping consistently, with significantly less volumes of powder being offered into intervention in the past week.

IFA president Joe Healy and IFA dairy committee chair Seán O’Leary have said “farmers are now producing for prices well below the cost of production. The cashflow situation on farms has now reached breaking point”. They are calling on the banks, Agriculture Minister Michael Creed and the wider diary industry to support Irish dairy farmers.

Conor Mulvihill, director of the Irish Dairy Industries Association (IDIA), said limiting supply could be damaging to the Irish dairy sector.

“As global dairy markets show the first sign of green shoots, we risk patently bad policy such as supply management in the EU… This will have very damaging implications for Irish farmers and industry in the years to come, and must be steadfastly resisted.”

ICMSA president John Comer said he hoped the aid package would deliver meaningful measures aimed at increasing milk price. “Dairy farmers want one thing and that’s an improved milk price,” he said.