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New EU aid package: what to expect

European Commissioner for Agriculture and Rural Development Phil Hogan is presenting a new support programme for farmers hit by falling prices to EU agriculture ministers in Brussels this Monday.

Thomas Hubert

Mon 18 July 2016 12:00 AM

Thomas Hubert

Mon 18 July 2016 12:00 AM

File photo: European Commissioner for Agriculture and Rural Development Phil Hogan at the council of EU agriculture ministers. Photo: European Union

Here is what we know as officials converge on the European capital:

This package will be smaller than the €500m one agreed last September. While there is money available in the EU’s agriculture budget, there are competing demands for it. Agreement on funding will largely shape the package.

The package will focus on dairy. While the official agenda includes the dairy, pigmeat and fruit and vegetables sectors, Hogan has already said that the Commission considered the pigmeat market was in recovery and would not require further support. The fruit and vegetable sector may receive assistance this Monday, but the bulk of any additional funding will go to dairy farmers. In a last-minute twist, the French government last week asked for beef support measures to be introduced as well.

Part of the new aid is likely to be linked to production cuts. European milk oversupply has been identified as a key factor in the current price crisis. The previous aid package switched on so-called article 222 measures, which allow processors and farmers to agree on milk supply cuts outside usual competition rules. These, however, have not been taken up because there was no financial incentive to do so. France, Germany and Poland have since joined forces to ask for EU payments to reward those who cut production. Ireland has opposed the suggestion. It is likely that at least part of the new package will be reserved for those who reduce milk output – just how much will depend on the strength and arguments of each side in this Monday’s discussions.

Part of the new aid will be left to national governments to distribute. The previous package left some leeway for EU member states to decide where some of the money was going, and this is likely to be the case again. Ireland has been among the most vocal countries asking for such flexibility.

Measures beyond direct payments: in the past few months, the EU has adopted additional measures to tackle the price crisis including twice raising the intervention ceiling for milk powder and doubling the maximum amount member states’ governments are allowed to distribute to farmers from national funds. The intervention season usually ends in September, but this is likely to be questioned this Monday. For more news from Brussels as it happens, stay tuned to www.farmersjournal.ie and to our news app throughout the day.

CAP Commissioner Phil Hogan Milk supply

New EU aid package: what to expect

European Commissioner for Agriculture and Rural Development Phil Hogan is presenting a new support programme for farmers hit by falling prices to EU agriculture ministers in Brussels this Monday.

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