EU grants new aid to struggling milk farmers

BRUSSELS, Belgium – The European Union (EU) announced Monday, July 18, a further 500 million euros ($553 million) for farmers to help reverse the plunge in prices shaking a dairy industry hit by overproduction and a Russian embargo.

The abolition of EU milk quotas in April 2015 helped trigger a collapse in prices that have not recovered despite an initial aid package for the same amount in September.

Subsidies for farmers have historically accounted for one of the largest parts of the EU’s budget under the controversial Common Agricultural Policy for the 28-nation bloc.

“This package provides a further robust response, and means that the Commission has mobilized more than one billion euros in new money to support hard-pressed farmers,” EU agriculture commissioner Phil Hogan said.

“Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work,” the Irishman added.

A combination of factors, including changing dietary habits, slowing Chinese demand, and a Russian embargo on Western products in response to sanctions over the Ukraine conflict has pushed down prices for beef, pork, and milk.

Germany will receive nearly 58 million euros, followed by France at just under 50 million euros, and the Netherlands at nearly 23 million euros, Poland with more than 22 million euros, and Italy with nearly 21 million euros.

Britain is one of the biggest with just over 30 million euros – despite the country having voted to leave the EU in a referendum last month.

The issue of subsidies for farmers in post-exit Britain promises to be a touchy one for new Prime Minister Theresa May’s government, although its new agriculture minister Andrea Leadsom sent a deputy for Monday’s talks.

Russian sanctions

The European Commission, the executive of the 28-nation EU, said the financial support was mainly for the dairy industry, and it noted it comes at a time of tight budgets, mainly due to the worst migrant crisis since World War II.

In a breakdown of the funds, which were announced at a meeting of EU agriculture ministers, the bloc will spend 150 million euros to compensate independent and other producers for each liter of milk they do not produce in a bid to cut oversupply and shore up prices.

Another 350 million euros will be distributed to the 28 member states that will decide what further measures to take to support their farmers. The member states will also be able to match the funds with their own money.

The Commission also “updated” its support for a multi-million-euro aid package to help European fruit and vegetable growers hit by Russian sanctions that expired June 30.

Stung by an EU decision to impose damaging economic sector sanctions after the shooting down of a Malaysia Airlines plane over eastern Ukraine in July 2014, Moscow retaliated with a ban on a wide range of agricultural imports.

The Commission said the precise details of the new measures will be finalized in the next few weeks and will require amending the 2017 draft budget. – Rappler.com