Member states have voted in favour of the Commission's proposal to extend public intervention and private storage aid (PSA) for Skimmed Milk Powder (SMP) until the end of February 2017.

The intervention and PSA period for SMP was originally due to end at the end of September 2016.

The proposal to extend these periods was made as part of the €500m aid package for livestock farmers announced by European Commissioner for Agriculture Phil Hogan in July.

This means that member states can continue to take SMP off the market for a further five months in order to put a floor under falling dairy prices, which have, in fact, enjoyed a moderate recovery in the past month.

The ceiling up to which SMP is bought into intervention at a fixed price will stay at the revised limit of 350,000t until the end of December 2016, after which it will revert back to the usual limit of 109,000t.

Six-month extension on Article 222

Member states also voted for a six-month extension of the Article 222, which allows European dairy farmers to cut milk supply in an attempt to raise prices, a practice normally banned under EU competition law. The enactment of this measure was first announced at the Council of EU Agriculture Ministers meeting in March this year.

The current period for operating under this measure was due to expire in October 2016 but member states today voted to extend it until April 2017.

€500m support package

No further details emerged on Thursday regarding the €500m support package, made up of €150m for a milk-reduction scheme and €350m for direct supports, of which Ireland is due to receive €11.1m.

It is expected these details will emerge on Friday morning so stay tuned to www.farmersjournal.ie for further updates.

IFA comment

IFA national dairy committee chair Sean O’Leary said Minister for Agriculture Michael Creed and his officials must ensure that everything is ready promptly for farmers to be able to avail from both the incentivised milk production reduction scheme and the direct support scheme.

Cashflow shortages remain the top problem for dairy farmers, and the minister must deliver urgently on the state-backed low-cost cashflow loans proposed by IFA

O'Leary added that just because milk prices have started to improve, this had not changed the fact that they remain "well below production costs".

"Cashflow shortages remain the top problem for dairy farmers, and the minister must deliver urgently on the state-backed low-cost cashflow loans proposed by IFA," he said.

He added that as Ireland's €11.1m portion of the €350m direct support package cannot be paid out to farmers as a flat rate payment, "Minister Creed can, and must, match the EU funds and utilise the potential €22.2m to provide farmers with low-cost short-term loans, or otherwise help them with their cashflow difficulties.”

"This type of loan package, based on the €15,000 state aid concession agreed in Brussels earlier this year, has been proposed by IFA earlier this summer, and while the response from the minister has been positive, the time for delivery is now,” he concluded.

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