Brussels to bring in new farm income stabilisation tools

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EU Agriculture Commissioner Phil Hogan has confirmed that he is developing an ‘Omnibus Proposal’, which sets out a range of technical changes to four basic regulations of the Common Agricultural Policy.

Addressing the recent EDA European Dairy Platform event in France, Mr Hogan said that the package will include a sector specific income stabilisation tool.

“This will provide simpler rules for accessing credit and other financial instruments. It will also propose to increase support for producer organisations. All these proposals respond directly to the concerns of farmers, and I want them to become effective from January 1st 2018,” he said.

Referring specifically to the prospects for dairy Hogan confirmed that, in total, more than €1 billion has been mobilised in the form of emergency measures for the sector over the past two years, adding:

“We have explored all possible avenues to support the sector in difficult times.

“And I do believe that these measures have been effective in relation to their expected goals, notably market stabilisation and cash-flow relief for farmers.

“It’s been a heavy burden for us all, and especially for dairy farmers, who have borne most of the load.

“The good news is that for some months now we are seeing signs of recovery.”

Mr Hogan highlighted that global demand, notably for butter and cheese, started to pick up in mid-2015.

He added: “The long-awaited reaction from the supply side finally materialised in the EU starting in June this year.

“This has translated into better dairy prices, which have substantially increased in the EU since May. EU butter prices have now hit the historical records of 2013.

“Experts in the Milk Market Observatory confirmed last week that prices for butter and cheese are expected to remain robust through early 2017.

“This improvement is also reflected in better farm-gate milk prices: up 10% from July to October. And these prices are expected to increase further through the end of the year.

“But now that prices are improving it is more important than ever that the sector remains market oriented. In this context, we are currently operating the milk production reduction scheme and the exceptional adjustment aid, which should contain to some extent the expansion in production.”

Mr Hogan concluded: “As long as we produce what the market demands, recovery is guaranteed. None of us has any interest in risking the balance which has been so difficult to achieve. Maintaining this balance requires an effort from all actors across the sector.”