4 September 2015

4 minute read

Europe

The Minister was speaking after meetings with Commissioner for Agriculture and Rural Development Phil Hogan and the French Minister for Agriculture Stephane Le Foll.

Speaking after the meeting the Minister referred to the significant challenges faced by farmers in the face of global price volatility: “We are all aware that primary producers are extremely vulnerable to downward fluctuations in commodity prices and increases in input costs. The current market dynamics are causing particular difficulties for dairy and pigmeat farmers in Ireland and elsewhere”.

He said: “There is no question of reverting to a Common Agricultural Policy focused on market management. However, it is precisely to alleviate the worst affects of volatility that the Common Market Organisation Regulation (CMO - 1308/2013) provides for the full range of market support measures, to be deployed as a safety net. The Council and the Parliament also recognised, in 2013, that the traditional market support measures may not, on their own, be sufficient to deal with market disturbance and provide, in that context, for exceptional measures against market disturbance. These provisions are designed with maximum flexibility and rapid action in mind, and I think it is time now to exploit these possibilities”.

Acknowledging the steps already taken by the Commission, the Minister welcomed the fact that the Commission had acted to extend the dates for Aids to Private Storage and Intervention in the dairy sector: “I very much appreciate that the Commission has acted to alleviate some of the pressure. I understand the deployment of market or exceptional measures can be a complex matter. However, the acute downturn in global milk and pigmeat prices over the past several months, are having a severe impact on farm incomes, and the time has come to explore the possibilities of deploying those and other market support provisions to help to put a floor under the market during this difficult, but temporary downturn”.

Minister Coveney presented a number of options to the Commission which he believed could be taken quickly to address the current difficulties:

1. using the flexibilities under exceptional measures to temporarily increase the threshold prices for butter and SMP to levels which provide a realistic floor price. Such an adjustment could provide a much needed positive market signal and a more realistic floor price over a period of acute, but temporary difficulty for farmers.
   
   
2. the restoration of Aids to Private Storage for cheese, which was introduced by the Commission in September 2014, and was utilised to good effect by operators in Ireland and elsewhere, but discontinued thereafter.
   
   
3. the use of funding from assigned revenues from the collection of superlevy to support the market for dairy products at this time, and if required as EU and Northern hemisphere production increases in the first half of 2016.
   
   
4. the use of exceptional promotion measures to promote the consumption of dairy and pigmeat products on EU, but especially on 3rd country markets.
   
   
5. increasing the advance of the Basic Payments and other elements of Direct Payments Scheme and from 16th October 2015 to 70 per cent , to alleviate cash flow difficulties;
   
   
6. restoring Aids to Private Storage for Pigmeat , which played a useful role in stabilising pigmeat prices earlier in the year, but had been discontinued.

The Minister travelled to Paris where he met with the French Minister for Agriculture, Stephane Le Foll and discussed the six point plan which he had presented to the Commission and sought support for this paper which will be discussed at the forthcoming Council of Agriculture Minister meeting in Brussels on Monday 7 September.

The Ministers also discussed Climate Change and Agriculture.

The medium to long term outlook for the global dairy sector remains broadly positive, having regard to global population and demand growth, and the quota free environment will allow European farmers and the dairy industry to respond appropriately to market opportunities as they arise.

Concluding, Minister Coveney indicated that he would be discussing these and other possibilities with other Member States in the lead up to the Council Meeting on 7th September.

“Swift action is now needed to restore market confidence. Member States and the Commission provided a flexible and responsive toolset for dealing with difficult market situations in the Common Agricultural Policy reformed under the Irish Presidency in 2013. We need proposals now that exploit the possibilities in the relevant regulations. Further consideration is also required at EU level on how to deal with the impact of volatility in the future.”

TheCattleSite News Desk