Support package to re-balance market

Jim Nicholson
Jim Nicholson

The European Commission’s new €500m agricultural support package aims to re-balance the market and improve prices.

The package is made up of three main elements, including a €150m EU-wide initiative to incentivise dairy farmers to cut milk production and a €350m ‘conditional adjustment fund’ to support vulnerable livestock sectors of which the UK has been allocated €30.19m. Northern Ireland will receive a share of the UK’s ‘envelope’.

The final element includes a variety of measures such as allowing member states to make advance payments to farm businesses. This aspect of the package should go some way to help alleviate short-term cash flow problems on farms.

Crucially, the conditional adjustment fund is to be implemented at national level and member states can provide a top-up of 100% without state implications. This puts the ball back into the court of national and regional governments across the EU who have had the power to match-fund initiatives such as this for some time. Will Stormont’s Agriculture Minister Michelle McIlveen now come forward with the extra funds to assist the agricultural industry in Northern Ireland and maximise the impact of our share of the €350m?

Whilst the proposals are welcome the question is: will they work? I question whether the package of measures provides the long-term solutions needed by the industry. As I said when Commissioner Hogan appeared before the Agriculture Committee on Tuesday; in the dairy market we are now trying to deal with the consequences of the decision to do away with milk quotas which was originally agreed to by Agriculture Ministers back in 2003. At that time the industry was told that the safety net would be sufficient to address volatility in the post-quota era – has this been the case?

When the Commissioner announced his proposals on Monday he himself questioned whether the instruments available could effectively deal with market crises. In my view a mid-term review of the CAP is needed to put in place new tools to tackle volatility and provide a responsive safety net for all farmers. I am therefore disappointed that the Agricultural Markets Taskforce will not now come forward with their final report until the end of this year.

Returning to this week’s announcement, how the measures are implemented by national and regional authorities will no doubt determine if this new package has more of an impact than last September’s. It is therefore vital that Northern Ireland’s Agriculture Minister fully utilises the flexibility that exists within the package to address the needs and priorities of the local agricultural industry.