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Article: Commission announces market intervention measures for EU agri-food products
23 April 2020
In a statement released on April 22, the Commission says the
EU's agri-food sector is showing resilience in these "unprecedented
times", but some markets have still been hit hard by the
consequences of COVID-19.
The EU executive therefore proposed the introduction of three
additional support measures, namely private storage aid; more
flexibility in market support programmes; and the authorisation of
self-organisation market measures for the most affected
sectors.
Agriculture Commissioner Janusz Wojciechowski said: "Today we
are announcing a new and exceptional package of measures to support
the most affected agri-food sectors by addressing already observed
disturbances as well as future risks. I am confident that these
measures will relieve markets, and show concrete results
rapidly."
The Commission foresees the introduction of private storage aid
(PSA) for dairy (skimmed milk powder, butter, and cheese) and
livestock (beef, sheep and goat meat). This means that EU money
would be used to pay companies to store these commodities so that
they can be sold back at a later time.
The scheme would allow the temporary withdrawal of these
products from the markets for a period of 2 to 6 months. The
measure is aimed at reducing the supply of dairy and meat and
thereby "rebalance the market on the long-term".
Meanwhile, the apiculture, fruits and vegetables, olive oil, and
wine sectors would get more flexibility for the implementation of
their market support programmes. The rules would also be eased for
the EU's school schemes for milk, fruits and vegetables. The
Commission says this would "allow the reorientation of funding
priorities towards crisis management measures" for all these
sectors.
Finally, producers of flowers, milk and potatoes will be granted
an exceptional derogation from certain EU competition rules under
Article 222 of the CAP's Common Market Organisation Regulation
(CMO) to enable them to adopt "self-organisation market
measures".
In practice, this means that these sectors will be allowed to
take collective measures to stabilise the market, with the milk
sector being able to jointly plan milk production and flower and
potato growersbeing able to withdraw their products from the
market. Storage of these products by private operators will also be
allowed, but all of these measures would only be valid for a
maximum of six months.
Commissioner Wojciechowski justified the new package by saying:
"The measures proposed are, in the present state of market
developments, intended to send a signal aimed at stabilising
markets and are considered to be the most appropriate for providing
stability to future prices and production and thus stable food
supplies and food security."
The EU executive aims to have the package adopted by the end of
April. However, the member states will first be consulted and vote
on the measures, so the details of the actions could still change
before they are adopted.
Pushed by EU policymakers and industry
The Commission had come under mounting pressure in recent weeks
to launch some form of intervention on the agri-food markets. Last
week (April 16), both EU agriculture ministers and MEPs formally
asked Wojciechowski to activate some of the market management
measures available under the CAP's CMO to help offset the COVID-19
pressure on the worst affected farming sectors.
Farming associations such as Copa-Cogeca and CEJA had launched
similar requests for market support to the EU executive. The
European Dairy Association had called for private storage aid for
butter, skimmed milk and cheese on several occasions as a way to
tackle the sharp fall in prices caused by the closure of
restaurants and other food services triggered by COVID-19. At an
early stage, Copa-Cogeca made a similar case to set up PSA for
dairy and livestock products.
The Commission's announcement nevertheless came as somewhat a
surprise, given that Wojciechowski still told the AGRI Committee on
April 15 that there was simply not enough money left for such
crisis instruments because the current EU budget period is nearing
its end.
This reaction did not go down well with the AGRI MEPs, with
vice-chair Mairead McGuiness saying that she was "underwhelmed" by
Wojciechowski's comments and that his reaction was "simply not good
enough" in these times of crisis.
However, it remains unclear whether the newly proposed measures
will be sufficient to silence such criticisms. EU policy-makers
also wanted to see the activation of other schemes such as public
intervention and an unused 'crisis reserve' worth €400 million per
year, while the dairy industry had been pushing the EU executive to
launch a voluntary milk volume reduction programme.
Several other measures approved
The package announced today adds to a range of other CAP
measures adopted earlier by the Commission to support the EU's
agri-food sector in light of the COVID-19 disruptions.
On April 16, it approved higher advanced payments of CAP
subsidies and agreed to reduce the number of physical on-the-farm
controls, while it had allowed member states to extend the
deadlines for applications one week earlier (April 6).
EU state aid rules have also been relaxed, allowing farmers to
receive up to €100,000 per holding as long as this financing is not
based on the price or quantity of products put on the market.