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The Council of EU agriculture ministers has decided to temporarily abandon its practise of paying a set price for skimmed milk powder (SMP) going into intervention.
On Monday, the Council decided that Europe will no longer buy SMP at the fixed price of €1,698/t when the scheme opens for annual season on 1 March.
It decided to set the quantitative limitation for buying-in skimmed milk powder at a fixed price at zero tonnes for 2018, as proposed by European Commissioner Phil Hogan.
This, it said, is an intervention “stabilise the dairy markets in 2018”.
Safety net
“This is in line with our commitment to keep track of market developments and to make sure that the safety net is used in a timely and prudent manner, not just to react to market disruptions, but also to avoid them in the first place whenever possible,” the Council said.
In 2017, public intervention stocks of skimmed milk powder (SMP) in the EU rose to almost 400,000t, thereby risking severe pressure on the market, with a negative impact on dairy prices.
“In order to avoid a drop in prices and a consequent worsening of farmers’ standards of living, the Commission proposed and the Council decided to forego the automatic buying-in of SMP in a context in which stocks are already very high,” it said.
“By setting the quantitative limit at zero for 2018, buying-in at a fixed price will not be activated automatically. However, the safety net will still function, as the EU will continue to be able to buy-in SMP through a tendering procedure, and to decide on a case by case basis how much to buy and at what price level.”
The adopted regulation will enter into force on 1 February.
The measure has attracted contrasted views, with dairy farming and processing organisations acknowledging the market risk posed by excessive stocks but warning against the removal of a useful safety net.
Restrictions on SMP will be for short term only - Creed
Over 1,800t of SMP sold out of intervention
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