European support for dairy industry

The European Parliament showed its support for the dairy sector at an event organised by European farmer’s organisation Copa.

The address delivered warned that prices paid to producers do not cover production costs and action is crucial to prevent dairy farmers going out of business.

Chairman of the Copa dairy working party, Mansel Raymond said: “We are experiencing a difficult short term market situation. The situation at world level, with China not yet back in the market, the unexpected political events in Russia and the lack 
of a proper functioning supply chain have contributed to today’s EU market instability”.

There was a call to the commission for the super levy fines to remain within the sector. There were also repeated calls for the public intervention for milk to be assessed in order to reflect production costs and put a real floor in the market. An emphasis was also placed on the need for new market development.

New Investment Funds for Farmers

The first of a number of conferences to promote new investment opportunities for farmers took place in Dublin. Agriculture Commissioner Phil Hogan, along with other high ranking members of the commission and representatives from the European Investment Bank (EIB), explained how additional funds from the EIB would be made available for farmers under Rural Development Programmes (RDPs).

In practice, a member state may work an EIB Financial Instrument – a loan or guarantee scheme – into its existing RDP to target a specific problem and support RDP objectives. Under this new plan, loans, backed by the EIB, could be provided to this group to allow them to borrow with minimal collateral and at favourable rates.

This is made possible because the EIB will shoulder the majority of the risk by guaranteeing up to 80% of the loan.

Ultimately the money has to be paid back, but this of course ensures that the investment is viable and improves farmers’ credit ratings.

This does not mean the end of grants to meet Rural Development objectives however, as it was stressed that these loans are additional and there to complement current grant systems.

Power in the food chain

Agricultural ministers in the European Council have held discussions around imbalances of power in the food supply chain, at the same time as farm representatives debated the topic in the European Parliament.

The ‘Dynamic Visegrad’ group of eastern European countries have recently called for the ‘elimination of disproportions of the common market caused by unfair trading practices’ and a ‘common legislative approach across the EU to improve the functioning of the food supply chain.’

In the parliament, EU farmers’ organisation Copa debated the merits of legislation at EU level to provide oversight to fully enforce codes of good practice.

These discussions come at a time when the parliament is developing its report on unfair trading practices in the food chain.