MercoPress. South Atlantic News Agency

European Parliament votes 300 million Euro support for dairy farmers

Angry dairy farmers dumped millions of litres of milk in protest

The European Parliament voted to provide €300 million for a fund to help dairy farmers. Earlier in the week EU Farm Commissioner Fischer Boel had proposed a 280 million Euros support. The decision follows weeks of protests by thousands of farmers over the low price of milk, including the spraying of milk onto fields.

Most of the EU's member states - including France and Germany - had been pressing for aid after the global economic downturn reduced demand. European dairy farmers say milk costs more to produce than they can sell it for.

Mariann Fischer Boel said she was forced to “empty her pockets” to meet the demands of 21 of 27 member states seeking an emergency fund for dairy farmers.

The aid will be drawn from the bloc's 2010 budget.

Last month, the EU announced it would change EU state aid rules to let member states pay each farmer up to 15,000 euros in temporary aid. That decision followed the dumping by angry Belgian farmers of three million litres of milk on fields.

French and German farmers have also dumped milk and blocked deliveries in frustration at the low prices for dairy produce.

Farmers say they want the EU to freeze planned increases in production quotas, because boosting the supply on the market lowers prices further.

The EU plans to phase out milk quotas by 2015 and to limit market intervention that supports prices, with a view to scrapping it in the long term.

The Commission plans to extend EU special purchases of butter and skimmed milk powder to at least February next year, to help farmers.

The European Parliament also backed measures to enable the Commission to adopt counter-measures quickly in the event of serious market disturbances in the dairy sector. This possibility already exists when prices change significantly in other farm sectors, such as meat and sugar. MEPs approved an amendment to make this measure temporary, until 2010.

However the European Community decided to reduce EU dairy export subsidies in response to the increase in international milk prices.

“The measure is technical”, said Micahel Mann spokesperson for the Agriculture Commissionaire who recalled subsidies are based in the difference between EU and international milk prices that are reviewed every fifteen days.

EU dairy exports subsidies are double pronged with one of them a “fixed” index, adjusted every fortnight. Currently they are 37.7 Euros for every 100 kilos of butter (previously 65); 17.5 Euros for 100 kilos of whole powder milk (before 35 Euros); skimmed powder milk, 0 (before, 22.8 Euros). Export subsidies for cheese remain unchanged because this market so far has not recovered.

“The changes are because EU milk prices are increasing and closer to world levels”, said Mann who underlined export subsidies are not at all related with direct aid for dairy farmers, voted by the European parliament.