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BGCSDADEELENESETFIFRHRHUITLTLVMTNLPLPTROSKSLSV
Opinion Number: CDR 642/2015
Rapporteur: SOUCHON René
Commission: NAT
Status: Adopted
Date: 16/04/2015
 
Appeler les instances européennes à prendre des mesures de sécurisation des revenus de tous les producteurs laitiers pour maintenir un tissu rural vivant sur l'ensemble du territoire européen comme l'on fait la plupart des autres grands pays producteurs de lait tels que l’Inde, la Chine, le Japon, la Corée du Sud, qui ont maintenu - voire renforcé, dans le cas des Etats-Unis (la réforme de la politique agricole des États Unis pour la période 2014-2018 adoptée par le Sénat américain le 04/02/2014 instaure pour le secteur laitier un dispositif d'assurance sur les marges associées à un système de gestion des volumes) - leurs soutiens ou leurs protections dans le secteur laitier.
In order to respond to the crisis hitting the milk and stock-farming industries in Europe, on 7 September 2015 the European Commission proposed a number of measures to the 28 European ministers responsible for agriculture, e.g. targeted national aid, advanced payments, private storage for powdered milk, etc. The CoR opinion had claimed that the loss of the milk quotas would lead to heavy distortions in the milk market.

The informal Council of Agriculture Ministers on 15 September 2015 adopted the proposition made by the European Commission. Prior to the discussion in the informal Council of Agriculture Ministers on 15 September, the CoR rapporteur sent a press release to recall the CoR position on the subject.

As requested by the CoR, the European Commission announced on 14 of March 2016 an additional package of exceptional measures using all the tools made available in the Common Agricultural Policy (CAP) to support EU farmers while safeguarding the EU internal market. The series of measures outlined by Commissioner Hogan to the agriculture Ministers of the European Union complements the €500 million support package from last September.

Application of voluntary supply management (article 222) : The Commission activated, for a limited period of time, the possibility to enable producer organisations, interbranch organisations and cooperatives in the dairy sector to establish voluntary agreements on their production and supply. This is the so-called Article 222 from the Common Market Organisation (CMO), which is specific to the agricultural sector and can be applied in case of severe imbalance in the market. The Commission has concluded that the strict conditions for the application of this article to the dairy sector are fulfilled in the current circumstances. This is an exceptional measure, which must also safeguard the EU internal market and was included by the legislators in the 2013 CAP reform but never used before.

Temporary increase in state aid: The Commission gave its full consideration to a temporary acceptance of state aid that would allow MS to provide to a maximum of €15,000 per farmer per year and no national ceiling would apply.

Doubling intervention ceilings for skimmed milk powder and butter : The Commission increased the quantity ceilings for skimmed milk powder and butter put into intervention from 109,000 tonnes and 60,000 tonnes respectively to 218, 000 tonnes and 100,000 tonnes.

Strengthening the producer in the supply chain: The Agricultural Markets Taskforce, launched as part of the €500 million support package from September 2015, will deliver in autumn conclusions and legislative recommendations to improve the balance in the chain. It was decided that High Level national representatives will meet with the Agricultural Markets Taskforce with the view to specifically look at the dairy sector.

On 11 April 2016, the Commission will be invited to inform ministers of the latest developments concerning agriculture sectors facing particular difficulties. These include the porc meat, dairy and fruit and vegetable sectors. It will also provide information on the implementation of measures listed in the presidency conclusions on market situation and support measures, agreed on 14 March. These measures aim to improve the situation of European farmers.

AGRI committee organised a hearing on the new exceptional market measures limiting milk production on 25 May 2016. In addition to Hans van Hoogeveen, Vice-minister for Agriculture of the Netherlands and Joost Korte, Deputy Director-General in DG AGRI at the European Commission, five experts have been invited to address Members and reply to their questions: Mansel Raymond of COPA, Tommaso Mario Abrate of COGECA, Romuald Schaber of the European Milk Board, Michel Nalet of the European Dairy Association and Isabel Vilalba of Via Campesina. Nearly everyone who spoke, regardless of political stripe, or whether producer or processor, urged the Commission to take urgent action. DG AGRI’s Deputy Director-General Joost Korte, who addressed the hearing, was also very frank about the limited impact of the Commission’s efforts to tackle the crisis so far. “The situation is not good, there’s no need for me to beat around the bush,” he said, adding that the results of both market intervention and the voluntary milk reduction scheme “had not been satisfactory,” principally because they failed to tackle the root cause of the problem — oversupply.

Agriculture Commissioner Phil Hogan hinted at a new targeted aid package for dairy and pigmeat farmers in July. The Commission and ministers discussed a possible aid package on the margins of informal farm council meeting on 30-31 May 2016 in Amsterdam — and are set to keep discussing it at June’s council meeting.

Contrary to the beliefs of DG AGRI whereby reducing production levels at European level alone could have no impact on European prices given the globalised market, the CoR study on an evaluation of the feasibility of the Market Responsibility Programme (MRP) showed that a temporary limitation on production levels would have a positive impact on all producers' income.

The default scenario sees an increase in producers' gross profit of around EUR 6 billion due to a 14% rise in milk prices for a 6% reduction in milk levels in a year.

In July, the Commission finally decided to put in place the Milk Production Reduction Scheme as requested by the CoR in his opinion on the Future of the dairy sector.

On the 18 July 2016, the Council was updated on the latest developments in the main agricultural sectors and on the state of implementation of previously agreed market support measures.

In response to the continued market downturn, and to the concerns strongly relayed by ministers, the Commission put forward a third package of support measures worth €500 million addressed mainly at the dairy sector, but also at the livestock sector. These measures are aimed at tackling the crisis by stabilising production and indirectly prices, and providing liquidity to farmers.

The Milk Production Reduction Scheme foreseen in the CoR study on the Report "Evaluation of the Market Responsibility Programme put forward by the European Milk Board taking 2014 as a test year" has already produced encouraging results.

The €150 million Milk Production Reduction Scheme, which the European Commission announced in July, has been almost fully subscribed (98.9%), with applications made offering to reduce production in the final quarter of 2016 by 1.06 million tonnes (of the 1.07 million tonnes available).

The Milk Production Reduction Scheme as foreseen in the CoR study on the Report "Evaluation of the Market Responsibility Programme put forward by the European Milk Board taking 2014 as a test year" has already produced encouraging results.

The Commissioner said that figures showed that "the scheme has proven to be both very attractive and successful. It fully meets our expectations. I am confident that this measure, allied to others included in the July and earlier packages, will contribute further to an already stabilising market situation in the European dairy market. I am particularly pleased at the level of participation among the main dairy producing Member States." The Commissioner noted that signs of recovery are already evident, particularly in certain commodity prices, but reiterated that his objective was to see "improving market sentiment translated into higher farm-gate prices to the benefit of producers."

The notifications received by the Commission show that over 52 000 dairy farmers in 27 Member States have applied to participate in the scheme, with offers to reduce production in the final quarter of 2016, relative to the same period last year. The volume reductions offered vary from producer to producer, but average 20 tonnes per applicant. In terms of production, this represents an average reduction of 16.5 per cent, which is a 2.9 per cent reduction in total milk deliveries in the final quarter of 2016.

The national take-up also varies considerably, with total volume reductions ranging from 286 000 tonnes in Germany and over 100 000 tonnes in France and the UK to less than 1 000 tonnes in Malta and Cyprus. The largest number of participating dairy farmers are in France (13 000), Germany (10 000), Ireland (4 500) and Austria and the Netherlands (both 4 000). In percentage participation rates, Ireland has a participation rate of 24%, followed by Belgium and the Netherlands (both 22%), France (19%) and Portugal (17%).

Because the overall volume offered was marginally less than that available, there will be a second round for the remaining 1.1 per cent (some 12 000 tonnes) for the period November 2016 to January 2017. This second round will be open only to those who did not apply for participation in the first round. The deadline for the receipt of complete applications for the second round is 12 October 2016.

Other elements of the package include: a review of voluntary coupled support agreements for the dairy sector and an extension of public intervention and private storage for skimmed milk.

Ministers broadly supported the package presented by the Commission and some underlined the importance of sticking to the market orientation of the CAP and to address structural market imbalances in the medium to long term.

The CoR reacted through a press release on the same day recalling the conclusion of the CoR study on the Market Responsibility Programme: only a mandatory reduction of the production could lead to an increase in prices.
The European Committee of the Regions

- proposes that the Commission do the necessary to make the intervention price more reflective of production costs and better attuned to market changes. The current intervention price, unchanged since 2008, needs to be revised to take into account increasing production and input costs and should be revised on a regular basis;

- would advocate, in the place of direct producer/dairy contracts, the establishment of local and regional producer organisations, not dependent on a single dairy, which would enjoy much greater bargaining power;

- suggests making contracting more effective by expanding the mechanism to the whole industry, including large-scale retailers;

- recommends improving the operation of the European Milk Market Observatory and putting in place the necessary resources for this observatory to become a genuine steering mechanism, and not just a tool for post hoc observation. In order to set up an effective early warning system within the observatory, it is vital that it produce monthly data on a sub-Member-State scale, to take account of differences in circumstances between European regions;

- notes that the Market Responsibility Programme put forward by the European Milk Board (to be applied when the milk market is threatened by imbalance) is a cheap and flexible proposal that should be examined and assessed as to its feasibility and effectiveness, taking 2014 as a test year;

- recommends developing support for milk production in disadvantaged regions, as part of a long-term strategic approach with a reinforced legal framework;

- with respect to dairy production in mountainous areas, calls for convergence in compensation payments for natural handicaps, the restoration of milk collection aid (co-financed by the Common Agricultural Policy budget), and support for the promotion and development of a "Mountain produce" label to be applied to these dairy products, subject to an adequate level of food self-sufficiency;

- calls for a sizeable rural development plan for the Baltic States, Bulgaria, Romania, Slovenia, a large part of Poland, and Greece.

Importance

High
Medium
Low
 

European Commission

Eu Agricultural outlook Conference Medium-term prospects for the EU dairy sector

 
01 Dec
 

European Parliament

‘Future-proofing the dairy sector: What do financial & risk tools mean for farmers?.

 
20 Oct
 

Council

Le Conseil informel des Ministres de l’agriculture à valider les mesures proposées par la Commission

 
14 Sep
 

Council

Afin de répondre à la crise qui frappe les secteurs du lait et de l’élevage (porcin en particulier) en Europe, la Commission européenne a présenté aux 28 Ministres européens en charge des questions agricoles, un « paquet de mesures » comprenant notamment :la mise en place d’un dispositif d’aides ciblées qui se traduira par des enveloppes nationales accordées à chacun des 28 Etats membres. des avances versées sur les aides PAC 1er et 2ème pilierun nouveau dispositif de stockage privé pour la poudre de lait une hausse budget promotion pour 2016 avec la constitution d'une réserve spécifique pour lait et porcl'avancement à 2016 du rapport sur le « paquet lait »

 
06 Sep
 

European Parliament

Adoption du projet de rapport en Session Plénière du Parlement Européen

 
05 Jul
 

European Parliament

Adoption du projet de rapport en Commission Agriculture du Parlement Européen

 
27 May
 

Council

Les ministres de l’agriculture de l’UE ont tenu leur dernier débat sur le secteur du lait avant la suppression des quotas, le 31 mars. Certains ont fait part de leur optimisme, d’autres de leurs inquiétudes. Le commissaire européen Phil Hogan n’a pas avancé de proposition nouvelle, mais annoncé une prochaine initiative commune avec la Banque européenne d’investissement pour la restructuration du secteur

 
30 Mar
 

European Parliament

Prospects for the EU dairy sector: draft report presentation. James Nicholson (ECR, UK) will present his draft own-initiative report onprospects for the dairy sector. For him, the expiry of the milk quota regimein April after thirty years of existence will present both challenges and opportunities for the dairy sector. The implementation of the milkpackage since October 2012 has been disappointing. Therefore, heencourages stakeholders along the dairy supply chain to avail themselvesof the measures under the Milk Package, and proposes new instrumentsto be considered by the Commission.

 
23 Mar
 

CoR Commission activity

Table ronde en commission NAT :Address by Aivars Lapins, head of the Latvian presidency's Agriculture, Food, Veterinary, Forestry and Fisheries Division Address by Riccardo Serrão Santos, EP shadow rapporteur on the milk package and the prospects for the European dairy sectorAddress by Brigitte Misonne, Animal products team leader in the European Commission's DG AGRI Address by Romuald Schaber, president of the European Milk Board

 
04 Mar
 

Rapporteur's activities

Milk Summit on "The end of the milk quota - challenges for the European dairy market", organised by The Ministry of Rural Affairs and Consumer Protection Baden-Württemberg and the Associaton of the German Dairy Industry (MIV Brussels

 
23 Feb
 

European Parliament

Hearing on "The milk package and the prospects for the dairy sector". Commission Agriculture

 
26 Jan
 

European Parliament

"End of milk quotas: what new control tools for the milk sector?french, italian, portuguese and spanish perspectives" à l'invitation de Michel Dantin et Pablo de Castro avec la présence de James Nicholson

 
20 Jan
 

European Parliament

S&D public hearing with experts, producers and MEP Ricardo Serrão Santos, S&D rapporteur on this issue

 
06 Jan
 

Rapporteur's activities

Territorial Impact Assessment workshopbased on ESPON quickscan methodology Analysing theSmooth phasing-out of the milk quotas in the EUReports COM(2012)741, COM(2010)727 and COM(2014) 354

 
26 Nov
 

European Parliament

Exchange of views on the own-initiative report "Prospects for the EU dairy sector - Review of the implementation of the Dairy package".

 
04 Nov
 

CoR Commission activity

 
 

The NAT commission appointed Mr René Souchon as rapporteur for the opinion on the Future of the dairy sector.

 
02 Oct
 

European Commission

Report on the dairy market and the "Milk Package" issued

 
12 Jun
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