Milk farmers to get controversial EU aid of €280 million

19.10.09 @ 16:23

  1. By Valentina Pop
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BRUSSELS - The EU commission on Monday proposed a special milk fund worth €280 million to ease the troubles of the dairy sector and to put an end to the continuous protests of farmers in the past months, including in Luxembourg where agriculture ministers were meeting.

  • A recent protest by farmers in Brussels (Photo: EUobserver)

EU agriculture commissioner Mariann Fischer Boel said her pockets were "emptied" and compared herself to a bird whose "feathers are plucked alive" after having been forced to give in to demands of 21 of 27 member states and furious milk farmers, who have protested everywhere the ministers have met in the past few months.

The €280 million emergency aid would be allocated to member states "according to their milk production," with national authorities then being responsible for actually paying the farmers, she explained.

A recent drop has pushed milk prices below the production costs, scrapping European dairy producers some €10 billion by the end of the year, according to Copa and Cogeca, the European farmers' associations.

But Ms Fischer Boel warned that the €280 million granted to dairy farmers meant no money would be left for other agricultural sectors if they were suddenly confronted with an emergency.

French wheat farmers last week set tires on fire on the famous Parisian boulevard, les Champs Elysees, to protest that grain prices have fallen below the cost of production.

Asked what she would tell other farmers who would want a similar aid, Ms Fischer Boel replied she would "simply say that it's been a priority of 21 member states to get funds for the dairy sector."

The commissioner also cast doubt on the efficiency of the scheme, which still needs the approval of the EU's finance ministers next month, by pointing out that in concrete terms, one farmer would get "less than €1,000."

To the question if this aid was enough, Ms Boel answered "I just tried to fulfil the political criteria of the €300 million requested by 21 member states."

French farm minister Bruno Le Maire and his German counterpart Ilse Aigner have been spearheading the demands for this special milk fund, while the UK and the Netherlands have opposed it.

Ms Fischer Boel said the market conditions were already improving, with butter prices going up 18 percent above the intervention threshold, but admitted that there was a delay between the increase of industrial prices and the increase in prices at the farm gate.

The EU plans to phase out milk quotas by 2015 and limit national authorities in propping up the prices. Ms Fischer Boel said she was happy that none of the agriculture ministers had raised any demands to scrap these long-term plans.

However, in an interview with French daily Les Echos, Mr Le Maire said that Brussels should abandon liberalisation of the milk sector.

Last month, the commission announced it would grant member states temporary exemptions from EU state aid rules, allowing them to pay each farmer up to 15,000 euros in emergency relief. That decision followed the dumping by angry Belgian farmers of three million litres of milk on fields.

But the European Milk Board (EMB), a lobby group on behalf of EU's milk producers, said in a statement that it didn't call for more subsidies, but "flexible production regulation."

"It makes no sense when ministers talk about money, which then flows into the milk sector in the form of subsidies with little impact," said Sieta van Keimpema, vice-president of the EMB. "Flexible production controls represent no extra burden to the taxpayer and can be an effective way of creating milk prices which are fair both to producers and consumers," she added.

The lobby group on Monday organised yet another round of demonstrations outside the building where agriculture ministers were gathering.

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