After meeting with member state representatives on the EU’s Agriculture Council at the beginning of the week, Agriculture Commissioner Phil Hogan announced a raft of new support measures worth €500m (£420m) for farmers struggling through the ongoing price crisis.

Commissioner Hogan said, "Coming at a time of significant budgetary pressures, this package provides a further robust response, and means that the Commission has mobilised more than €1 billion in new money to support hard-pressed farmers. Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work and continue to provide safe, high quality food for citizens, as well as their contribution to rural areas and rural jobs and the provision of public goods."  

Though the precise details of the aid measures will be finalised later int the summer, there are three main elements to the package unveiled by the Commission:

• An EU-wide scheme to incentivise a reduction in milk production (€150 million)
• Conditional adjustment aid to be defined and implemented at Member State level out of a menu proposed by the Commission (€350 million, but Member States will be allowed to match with national funds, potentially doubling the level of support being provided to farmers).
• A range of technical measures to provide flexibility (e.g. on voluntary coupled support), cash-flow relief (through increases of advances for both direct - 70% -  and area-based rural development - 85% - payments from 16th October) and reinforce the safety net instruments (by prolonging intervention and private storage aid for Skimmed Milk Powder).

The UK stands to receive over €30m of the Conditional Adjustment aid pot, the third largest portion of funding, after France and Germany. Funding is concentrated on the dairy sector, but some measures also touch on fruit and vegetable growers and pig producers.

Reacting to Commissioner Hogan’s announcement on Monday, Pekka Pesonen, secretary general of EU farm union Copa & Cogeca welcomed the package but said more clarification is needed on how farmers will have access to funding under the various mechanisms. Pesonen continued, “We welcome the fact that EU Farm Ministers have broadly endorsed the plan put forward by EU Farm Commissioner Phil Hogan to help solve the unprecedented crisis hitting EU agricultural markets.

“We look forward to getting further clarification on the details when member states experts discuss the rescue package in the next weeks. We urge them to agree the package as soon as possible to help improve producers short term cash flow problems so that they can meet upcoming demand.”

Pesonen said, “It is good news that the EU public intervention and private storage aid schemes for skimmed milk powder have been extended to early next year as it will give operators certainty to plan ahead.”

“We welcome the EU Commission plan to update the withdrawal price for fruit and vegetables as it no longer reflects market realities, but we need more information on the level of this. Finally, we expect the Commission to further assist the pig meat sector to diversify our export markets.”

This week’s announcement from the Commission comes after an earlier €500m support package unveiled in September last year, and the activation of Article 222 in March, which permitted voluntary agreements among milk producers on planning milk production.