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Stop the fall in milk prices by financially encouraging production cuts. The European Commissioner for Agriculture, the Irishman Phil Hogan, confirmed, Monday, July 18, during a European Council of Ministers of the sector, a further € 500 million euros of emergency aid, to ‘halt the downward spiral that carries the milk prices for over two years and jeopardizes the situation of many farmers
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the funding will be divided in two envelopes. The first 150 million, should enable to encourage milk producers to reduce their volumes, with a goal of a reduction of 1.4 million tonnes of milk. Farmers will be paid in proportion to the non-liter products (approximately 10.7 cents per kilo of milk) .
“ this is the first time after the end of quotas that finally the question of the need to reduce the production is very important for France he should have done much more quickly, “said Minister french agriculture, Stéphane Le Foll in Brussels.
the second tranche of EUR 350 million will be paid to the 28 member states, according to a distribution key related in particular to the amount of small farms they count. France should receive 49.9 million. Capitals can add up to 100% of the amounts received, to help their farmers Brussels tolerating this form of state aid provided that it does not encourage increased production. The money will not go to increasing herd, but will be intended for training, environmental actions, etc.
Finally, the Brussels “classic” of price stabilization, l this is to say “intervention” (Brussels buys powdered milk directly to producers) and private storage (farmers are invited to store their production and paid accordingly), which had to stop late September, will be extended by several months.
Overproduction
these proposals are in line with those issued in recent weeks by France, with Germany and Poland, since joined by Italy and Spain. Paris had even obtained that the need for financial assistance is mentioned in the conclusions of the Council of Heads of State and Government of June 28, the one that followed the vote Brexit British.
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two years ago that the situation in Europe has deteriorated, with the end of milk quotas since 1 st in April 2015, the brake on Chinese imports and the Russian embargo, decreed mid-2014. It was followed by overproduction, domestic demand has not increased.
After reaching 365 euros per tonne in 2014, milk prices fell to 305 euros in 2015, before slipping around 275 euros currently. Or, as recalled Thierry Roquefeuil, president of the National Milk Producers Federation (NPFL), production costs are estimated at 350 euros in France.
“C is a disaster for many producers, especially for young people who settled “ says he.
in fact, the rate of cessation of activity in 60,000 French farms, which employ 110 000 farmers, is expected to double this year. While naturally fluctuates between 4% and 5% per year due to retirement, it is expected to be around 9%.
“The goal is not to have aid ‘
the situation is similar in other EU countries, including Germany. According to a study the European Milk Board (EMB), the average milk price in April is not even possible to cover two thirds of production costs in Germany. “This forced farmers to tap into their own pockets,” by not paying themselves and by borrowing laments Romuald Schaber, president of EMB, “and if these sacrifices not enough, many farms abandoning milk production ‘
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in March, Paris was again stepped into the breach, calling for additional measures. But at the time, during the crisis of migrants, the Commission had kicked into touch: no question of giving a penny more to agriculture, while the emergency was elsewhere. Another formula was proposed: the activation of Article 222 of “the common organization of the market” of the CAP (Common Agricultural Policy), allowing producers and cooperatives to organize to collectively reduce their production. But no one was too many illusions about the effectiveness of this measure, aware that without financial incentive, it was unlikely to convince the professionals.
Paris had persevered in his application for financial assistance, believing that a decline of 3% of European production would reverse course. It would be enough for it to devote between 250 and 600 million, taken from the margins of the CAP budget, according to the French.
“The situation is paradoxically, we recognize the ministry of agriculture, since this is restore value to a production reduction. “
The other imperative that this simple system based on voluntary to be effective is to be operational before the end of the year. “The goal is to find a price of milk, and not to have support,” estimated the head of the NPFL, Mr. Roquefeuil.
For the Commissioner Hogan no question of returning to milk quotas, abolished in 2015, after more than thirty years of existence. A widely shared sentiment among the 28 countries. Because with 500 million euros will also benefit British farmers. “The UK is still part of the Union, with all that this implies rights and duties,” are we reminded the Commission.
numbers
7.5 billion
This is the amount received by the France per year over the 2014-2020 period under the common agricultural policy (CAP).
€ 500 million
It ‘ envelope that the European Commission has released for the 28 member states in September 2015, to stem the fall in milk prices following the removal of quotas on 1 st in April 2015.
500 million euros
This is new money that Brussels will unlock again urgently mainly for milk producers from the end of July, 150 million to finance the production of reduction measures.
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