Ireland gets 11m in new EU dairy package

milking machine

The European Commission has unveiled €500 million aid package for the EU Agriculture sector with particular emphasis on the dairy sector.

The package includes a €350 million conditional adjustment aid measure to be implemented by Member States – from which Ireland will receive €11.1m – and a €150 million EU wide measure to support voluntary reduction in milk production.

The European Commission also announced the extension of public intervention for Skimmed Milk Powder and private storage aid schemes to February 2017.

The package also includes provision for advance payment of key farm support payments.

The payment of up to 70% of direct payments and 85% for area based RDP payments from October 16 is to provide further relief to farmers experiencing liquidity issues, according to the Commission.

The package contains three main elements:

  • A 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 that Member States will be allowed to match with national funds, thus 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 (e.g. through an increase in the amount of the advances for both direct and area-based rural development payments) and reinforce the safety net instruments (by prolonging intervention and private storage aid for Skimmed Milk Powder).

The precise details of all the different measures will be finalised in the coming weeks, in consultation with Member State experts. Commenting on the package Minister Creed said he welcomed the fact the Commission has taken a two-pronged approach to dealing with the issue.

“Ireland’s views in relation to supply management are well known and we did not want today’s package to be focused exclusively on production discipline, although there were strong demands for that from some Member States.

“So the fact that 70% of today’s package has been directed to adjustment aid is very welcome. In relation use of these funds, I have argued strongly that the maximum possible flexibility needs to be given to Member States.

“While we still await full details, which we will examine closely, the flexibility indicated by the Commissioner to provide liquidity support to farmers is welcome,” he said.

Minister Creed commended Commissioner Hogan for delivering this package concluding that “€500 million is a significant package in the context of competing demands for funding within the EU at this time and underlines the Commissioners capacity to deliver for the Agriculture sector within the EU”.