Increased Aid to the Farming Sector

EMERGENCY FARMING DAIRY PACKAGE "LIKE GIVING ROSCOMMON A ONE-POINT LEAD IN A HURLING MATCH AGAINST KILKENNY" – LUKE MING FLANAGAN

During the recent Council meeting of the Agriculture Ministers on September 7th 2015, the Commission announced a €500 million support package to provide immediate and significant help to farmers. The package itself consists of several elements:

  • Private Storage Aid (PSA)

  • Targeted Aid

  • Advance Payments to Farmers

  • Aid for promotion measures.

PRIVATE STORAGE AID (PSA)

This proposes an enhanced private storage aid scheme to more effectively alleviate pressure on the supply side. It is a new tool to guarantee that surplus products are effectively kept out of the market for a period long enough to enable the market to recover.

  • For skim milk powder (SMP), the storage period is fixed for one year, with aid rates increased by over 100% compared to the standard scheme.

  • For cheese, the proposed scheme foresees private storage aid for a quantity of 100,000 tons, broken down per member state based on their respective cheese production in 2014, with redistribution of unused amounts after three months.

  • For pig meat, again private storage aid will be used to temporarily take pig meat from the market and give operators time to look for new market opportunities. To stimulate a better uptake, the aid rate is increased compared to the last time the measure was implemented. Fresh lard is included in the scheme responding to calls for 'fifth quarter cuts' to be included.

TARGETED AID

An EU envelope of €420 million is distributed among all member states based on national milk quotas (quota year 2014-15) – that's 80% of the full amount.

The remaining €80 million (20%) is distributed as follows:

  • a top up for those with lower prices;

  • a top up for those most affected by the Russian embargo;

  • a top up for those with pig meat price decreases above the EU average decrease.

This will be worth approx. €13.7 million to Ireland. Member states are to be given flexibility to implement as they see best in their own country but how this is to be distributed in Ireland is still to be agreed, though 70% dairy and 30% pig sector is the speculated split.

ADVANCE PAYMENTS

Increased advances of direct payments (from 50% to 70%) and area- and animal-related rural development measures (from 75% to 85%) are proposed to alleviate farmers' cash flow problems and make it possible for them to absorb losses until a stabilisation of markets is reached.

PROMOTIONAL MEASURES

The promotion policy supports farmers in their endeavours to develop new markets. It is a measure that takes time before its results become visible and is an instrument that affects the market situation in the longer term.

Under this policy:

  • the general EU-co-financing rates go up from 50% to 70-80%;

  • the scope of eligible products is widened to all Annex I products (apart from tobacco);

  • new types of beneficiaries (e.g. producer organisations) are eligible for support;

  • the annual budget will more than triple from €60 million to €200 million in 2019.

2016 is the first year of implementation of the reformed promotion policy and in light of the particularities of the market situation, it is proposed to bring forward €30 million to increase the amount available for dairy and pig promotion in 2016.

This package of €500 million will be funded from within the 2016 CAP budget, not from the crises reserve.

Reacting to the proposal at the mini Plenary in Brussels last night (Wed), MEP Luke Ming Flanagan welcomed Commissioner Hogan's Damascene conversion to now recognizing the situation in the dairy sector as an "on-going crises" whereas a few weeks ago it was regarded as a "short-term difficulty".

In relation to the proposal itself he said the problems were not going to be solved by the limited amount of money on offer. While it was welcome, he said it was like "giving Roscommon a one point lead in a hurling match against Kilkenny. The problems now in the dairy sector, which mirror those right across the food chain, is one of market imbalance where the power is concentrated in the hands of a few processors and retailers. Tackling this to rebalance the market so that farmers get a fair share of the final retail price is the only long term solution."

 

AgriculturePaul Cotter