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2nd Jul 2022

Agriculture ministers accept Commission aid plan

  • The Commission's aid package follows protests by farmers (Photo: Peter Teffer)

Most of the EU's agriculture ministers were cautiously optimistic about the EU commission's €500 million aid package for Europe's struggling farmers, after receiving additional details on the plan at a meeting in Luxembourg on Tuesday (15 September).

“Most participants in the meeting generally welcomed the package of measures announced by the Commission as an initial response to this situation, whilst suggesting possible improvements”, said Luxembourgish agriculture minister Fernard Etgen at a press conference.

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The meeting followed the Commission's announcement of an aid package last Monday (7 September) at an emergency meeting of farming ministers. Several of them criticized the commission for the lack of clarity, including how the money will be distributed.

“The problem was that there was too little cash on the table and that the measures were very unclear”, Flemish agriculture minister for agriculture Joke Schauvliege told reporters before the meeting.

“That's why the European Commission had to redo its homework and come back today with answers and hopefully more cash.”

The commission did not bring more cash, but did specify how the €500 million would be spent. The bulk of it, €420 million, will be handed out to the EU's 28 member states.

The distribution key was released by the commission on Tuesday.

The three largest member states receive the most money: €69.2 million for Germany; €62.9 million for France; and €36.1 million for the United Kingdom.

The Netherlands (€29.9 million), received a proportionally high percentage when compared to its population, as well as the Baltic states Lithuania (€12.6 million), Latvia (€8.5 million), and Estonia (€7.6 million).

The distribution key was calculated as follows, Phil Hogan told ministers, according to a prepared version of his speech:

“Reflecting the significant drop in dairy prices over the past year, which has affected all EU producers, the vast majority of the total amount - 80 per cent - is allocated on the basis of MS [member states'] milk quotas in the last quota year”, said Hogan.

The remaining 20 percent was calculated by looking at EU countries “which have been particularly hit by the fall in pigmeat prices, the impact of the Russian ban, very low milk prices and this summer's drought”.

At the press conference, Hogan noted that “there were no issues blocked today” and that when handing out money it is always difficult to keep everyone happy.

“I believe we got the balance okay. Nevertheless, there will always be some member states that would feel they should get more,” said Hogan.

The Irish commissioner noted that the emergency package is an “exceptional” measure, indicating that it is unlikely to be repeated next year.

Much of the package was funded by the so-called super levy - fines handed out to countries that exceeded their milk quota - a system which has been abolished this year. The last super levy was higher than expected.

Other measures included allowing EU countries to give a higher advance to their farmers than before – 70 percent instead of 50 percent of EU subsidies for 2016 will be allowed to be distributed in mid-October. Hogan adapted his original proposal by doing away with the requirement for anti-fraud measures, to speed up the possibility of paying out subsidies.

“In response to the call from a number of member states for further flexibility, I will now propose that Member States may pay 70 per cent of advances after the administrative controls have been completed and without the need to complete the on-the-spot checks”, Hogan told ministers.

The commission also announced it would buy around €30 million of milk products from European farmers, and distribute them to refugees.

Another measure would be to begin and enhance storage programmes whereby private storage of skimmed milk powder, cheese, and pig meat would receive funding. The idea is that once prices have increased, the stored products can be sold again.

It said it would begin the administrative process this week to implement the plan.

EU farming crisis to stay 'for some time'

Agriculture commissioner due to present package of relief measures next week but said he's "constrained" by financial resources and by EU legislation.

EU farm chief questions own milk scheme

The EU just ended milk quotas. On Monday it reinstated them on a voluntary basis after prices crashed. But the EU commission itself doubts the new scheme will work.

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