European farmers are to be given a second €500m aid package in the wake of continued sluggish farm incomes. However, there is unlikely to be a flat-rate payment like the one received as part of the €500m package announced last September.

EU Agriculture Commissioner Phil Hogan announced details of the package in Brussels on Monday.

The package contains two strands – a €150m budget to incentivise the reduction of milk production and €350m in other supports.

Farmers across Europe will be offered incentives to cut a percentage of their milk supply on a first-come, first-served basis, with a figure of 12c to 14c/kg of milk or 14.42c/l being mooted as the compensation price. The Irish Farmers Journal understands that individual farmers can take up the offer but then must work with their processor.

Milk production must be cut between 1 October and 31 December 2016, with payments then being made to farmers in the first quarter of 2017. There is no great appetite among Irish farmers or industry to cut reduction with milk collections reducing, but the scheme is likely to be taken up by large amounts of farmers in Belgium, Netherlands, Germany and France.

€350m package

Aside from the €150m to help reduce the volume of milk in Europe, a €350m package for all 28 member states in the EU has been created. Of this, the European Commission has given Ireland €11m, which the Government can add another €11m to. This would likely have to come from Department of Agriculture unspent money.

While Commissioner Hogan has said this money is available to all livestock farmers, except pigs, it remains to be seen if sheep and suckler farmers will get access to this money. This will be a decision for agriculture ministers in the respective countries.

What is different to September’s package is that there is unlikely to be a flat-rate per-farmer payment. Last year, Irish farmers received just under €1,400, with young farmers receiving a further top-up.

The Irish Farmers Journal understands that another ‘blank cheque’ payment like last year is not preferred by decision-makers, but instead the money is likely to be used more creatively, with low interest rate loans similar to the Glanbia Milk Flex scheme. This could be open to all livestock farmers.

The option is open to member states to put their portion of the €350m package into adding further funding into the milk reduction scheme.

Other aspects of the package include the extension of intervention for skim milk powder past the end of September up to February 2017.