Last week the Commission proposed two changes to the rules governing the dairy sector as part of its efforts to stabilise the EU milk market. It proposed a disturbance clause (which already exists for other farm sectors) to allow a quicker response to future market disturbances and changes to the operation of milk quota buying-up schemes.
The quota change will allow Member States operating national buy-out schemes (not the UK) to freeze that part of quota from their national reserve, triggering superlevy more quickly. If superlevy is collected, the part corresponding to the bought-up quota can be used for restructuring of the sector.
These proposals will be discussed by EU Agriculture Ministers on 19 October. In addition, later this month, the Commission will formally adopt changes to state aid rules to allow Member States to pay farmers up to €15,000 each in national aid before the end of 2010.
As part of the Commission's medium to longer term measures to help the dairy industry, Member State representatives will be holding the first meeting of a new High Level Group for Dairy in Brussels this week. The group will set out a framework for the future and will be working with national experts and stakeholder organisations.

Positive signals on
dairy prices
The most recent data from DG Agriculture shows that prices are improving not only for all dairy commodities but also for raw milk at the farm gate. The average milk price in July/August is estimated at 25-26 cents/litre and recent information from major European processors suggests a further increase of 1-2 cents for delivery in September/October. Last week's monthly Milk Management Committee in Brussels saw no butter offered for intervention – an indicator that prices are recovering. A further positive indicator was provided by the Frontera auction price last week where average prices for Whole Milk Powder increased again by nearly 6%.
First international
sheepmeat forum
UFU Deputy President Harry Sinclair and Policy Officer David Thompson joined delegates from around the world in Brussels last week for the first ever International Sheepmeat Forum. Agricultural Commissioner, Mariann Fischer Boel, declared that "sheepmeat is not a commodity, it is full of nutrition and taste" then went on to say that even her kitchen-shy husband was able to produce tasty lamb meals. She recognised the challenges facing the sector but criticised the poor uptake of promotional funding available to the industry. "I cannot believe that a determined, creative campaign won't make a difference". Everyone enjoyed finding out how Australian sheep farmers have used the media to promote their lamb sales. The forum concluded with a set of key messages to be taken forward including the need for new product development to meet consumer demand and increased international co-operation in research and development.

WTO to consider US
poultry request
The US has confirmed that it has asked the World Trade Organisation (WTO) to determine if a barrier to exports to the EU is a violation of WTO's rules. The disagreement is over anti-microbial treatments used on poultry meat in the US but prohibited in the EU to defend food safety. The WTO will consider the US request later this month. This may slow down any EU move to reconsider the use of lactic and acetic acids in red meat which is part of moving to Phase 2 of the EU-US beef hormone agreement.

Animal transport proposals
on hold again
The UK NFUs welcomed the news last week that the Commission's proposals to amend the animal transport regulations will not be taken forward during the current Commission. A number of objections have been raised, including lack of up to date scientific knowledge, meaning that the proposal will have to wait until the new Commission is in place early next year.