Farm groups have welcomed calls from the EU’s farming ministers for a new package of measures to help alleviate the impacts of the ongoing crisis.

Member state agriculture ministers made the call after a high level meeting with EU farm organisation Copa & Cogeca in Luxembourg. Ministers called for a fresh package of support measures to be presented by agriculture commissioner Phil Hogan in July. The Commissioner said he will table further EU-wide dairy support measures on 18 July, indicating that further support is likely to be linked to supply controls.

The Commission’s last support package was activated in March, and added to the €500 million package granted in September 2015, with a series of new measures and promises to look into improving farmers’ bargaining position in the supply chain.
 
The farm lobby group said that the Brexit vote last week has added to uncertainty and stands to hit farmers across Europe with more volatility; when the result of Britain’s EU Referendum was announced last week Copa Cogeca pledged that it will “Work to ensure farming Community does not pay a price for International politics.”

Speaking after the meeting, Cogeca President Thomas  Magnusson said “The market situation at farm level is really not improving, being hit by a combination of factors including the economic downturn, high input costs and low prices as well as the Russian export ban. Farmers are suffering from severe liquidity problems. The UK vote in favour of Brexit  adds to the uncertainty. It will be crucial to avoid any further disruptions to the market.”

Magnusson said of the proposed package, “We urge Ministers to agree on a new package of measures to support the sector, using additional funds without affecting the crisis reserve. New tools must be activated and new markets found using exports credits to give traders more certainty when they export”.

No silver bullet

However, NFU Scotland’s Milk Policy manager George Jamieson said that the support package would be likely to offer only short term support, and is unlikely to be the ‘silver bullet’ needed to balance markets and drive up prices.

He said, “We must wait and see what Mr Hogan has to offer but this belated effort from the Commission is unlikely to be ‘the silver bullet’. There is no doubt that dairy has needed help for many months now, and Hogan’s commitment to a package has been too long in coming. Regardless of the terms, its scale is unlikely to be significant in comparison to the losses dairy farmers have been exposed to for almost two years.

“The debate on supply management at a European level has failed to generate any coherent plan and provide any assurance that it would have the desired effect of balancing markets and driving up prices. There is a strong argument that supply management now may actually do more harm than good as production in Europe and beyond is declining and markets are slowly starting to turn.”

Jamieson said new ‘financial instruments’ which would offer dairy farmers, their banking creditors and the supply chain some assurance that their business plans are sustainable, would be a significant benefit. He said the union is continuing to engage with banks, government, retailers and producers to ensure that they react to changing market signals and raise prices without delay

The NFUS Milk Policy Manager continued, “The current situation in Scotland’s dairy sector remains dire with an alarming number of dairy producers continuing to face prolonged losses.  Although markets are turning, they remain some substantial distance from a return to profitability. This is global issue, but the Commission, and both UK and Scottish governments have been slow in accepting the scale of the problems.

“We will have to wait and see what the package options are and how much money is available. For hard working dairy farmers, it is unlikely that ‘business changing’ sums are involved. National flexibility on delivering the package may ensure it is utilised in the most meaningful way.