Following a
meeting with EU member state officials on Thursday, the Commission confirmed this Friday that “it will be an EU-wide scheme, so that it will be up to each individual dairy farmer to decide whether he/she wants to participate”. According to a Commission source, eligible farmers are those who were milking cows in July 2016. As announced in July, the scheme will operate for an initial period of three months this October, November and December, with participating farmers invited to cut milk supply compared with the same period last year.
Following a meeting with EU member state officials on Thursday, the Commission confirmed this Friday that “it will be an EU-wide scheme, so that it will be up to each individual dairy farmer to decide whether he/she wants to participate”. According to a Commission source, eligible farmers are those who were milking cows in July 2016.
As announced in July, the scheme will operate for an initial period of three months this October, November and December, with participating farmers invited to cut milk supply compared with the same period last year.
The 14c/kg aid (14.4c/l) will be payable on volumes of milk not produced during the period. Each participating farmer will have to commit to a supply cut above a minimum to be set in September, and up to a maximum of 50% of their production for the same period last year. Once a farmer has committed to reducing milk production under the scheme, there will be “penalties for failing to reduce production for the full amount offered”, the Commission warned.
At the end of the three-month period, “farmers will then have 45 days to provide the proof that they have reduced production – following which the aid can be paid”. A Commission source added that "payment shall be made no later than the 90th day following the end of the reduction period, unless an administrative inquiry is ongoing". This means that farmers who verifiably cut production in the initial October-December period must be paid by the end of March.
Member states can allow co-ops and producer organisations to manage the scheme.
Reduction coefficient
The overall budget of €150m for the measure is equivalent to 1.1bn litres across the EU. If requests from member states exceed this ceiling in October for the initial period, “a reduction coefficient will be applied” to share the support across the EU. If the ceiling is not reached initially, the European Commission will accept more bids from member states for further periods in November to January, December to February and January to March until the budget is spent.
“I am confident that this measure will contribute significantly to improving market sentiment and will be reflected in improved prices for European dairy producers,” European Commissioner for Agriculture Phil Hogan said in a statement.
Farmers will need to weigh up the value of higher constituents in late lactation milk versus this delayed payment
IFA dairy chair Sean O’Leary called on the minister for agriculture to make application forms available urgently before the first application deadline of 20 September. “Farmers who are considering participating in the scheme should bear in mind that the aid will likely be paid as late as March 2017 for those who have verifiably reduced production in the last quarter of 2016 and that there may not be any funding left for the following three three-month periods if the scheme is fully subscribed in the first period,” he said. “They will need to weigh up the value of higher constituents in late lactation milk versus this delayed payment.”
The Commission and member states have also agreed a list of measures countries can choose from to distribute the other €350m of the July aid package, €11.1m of which is going to Ireland. Member states can choose to distribute the aid to any of the dairy, beef, pigmeat, sheepmeat or goatmeat sectors.
They have set conditions aimed at “ensuring that the support reaches farmers engaging in activities of a market stabilisation and economic sustainability nature”, the Commission said. This means money will be available to farmers who engage in one of the following:
production reduction or not increasing production;small-scale farming;the application of extensive production methods;the application of environmental and climate-friendly production methods;the implementation of cooperation projects;the implementation of quality schemes or projects aiming at promoting quality and value added;training in financial instruments and risk management tools.Member states have until 1 November to choose which measures they will implement and whether they will add national funds to their European envelope. They must then pay the aid to farmers by 30 September 2017.
Today’s commitments will be of great assistance
In a statement issued this Friday, Agriculture Minister Michael Creed welcome the set of rules agreed on Thursday and commented: “I have always said that the solutions have to emerge at EU level and today’s commitments will be of great assistance."
He stopped short of indicating which measures Ireland would choose, or whether Exchequer funds would complement EU money, instead promising further announcements "in the very near future".
As reported on Thursday, the Commission and member states have also agreed to extend intervention and private storage aid for dairy products past the end of September.
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Listen: ‘Huge interest’ in EU milk supply cut scheme - Hogan
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