25 Jun 2015
EU COMMISSIONER MUST REVIEW DAIRY INTERVENTION PRICES AS PROVIDED BY LAWBrussels Daily, Dairy
IFA President Eddie Downey this week met with and wrote to EU Commissioner for Agriculture Phil Hogan to express his concerns on dairy price pressures. He asked the Commissioner to have his services undertake an immediate review of dairy intervention prices, as the Commission is mandated to do under Article 7.2 of the European Parliament and Council Regulation 1308/2013 – the regulation within the CAP that deals with ‘Common Market Organisation’.
Mr Downey explained that Article 7.2 states that the reference thresholds, i.e. intervention prices, “shall be kept under review by the Commission, taking account of objective criteria, notably developments in production, costs of production (particularly inputs), and market trends”. The article goes on to state, “When necessary, the reference thresholds shall be updated”.
“The pressure on milk prices has been intensifying in recent weeks, and they have been falling in an increasing number of member states, well below the €30/kg threshold above which Commissioner Hogan had warned one could not speak of crisis. Meanwhile, there has been no account taken of the massive long term increase in production costs incurred by farmers, and a revaluation of the butter and SMP intervention prices is now well overdue,” he said
Commenting on the issue, IFA National Dairy Committee Chairman Sean O’Leary added: “The EU Commission has been referring to the intervention regime as the ‘safety net’ – a safety net is meant to catch you before you hit the floor. At a farm gate price equivalent of around 22c/l, current intervention prices simply cannot credibly be described as a ‘safety net’. Production costs have increased strongly since 2008, the last (downward) adjustment of the intervention price, I believe an increase of the intervention prices is well overdue”.
“We are aware that setting the process in train, with all its legal implications, will take time, and the value of a higher, and regularly reviewed, safety net is not just for the short term,” he said.
“But the very announcement by Commissioner Hogan that he has tasked his officials to undertake this review will send an immediate message to international markets and can help speed up the end of the current downturn,” he said.
“We have also raised with the Commissioner, both directly and through our European organisation COPA, the desirability to retain within the dairy budget the estimated €700m of total EU 2014/15 superlevy – a massive drain on European dairy farmers’ resources even after the quota regime has ended,” he concluded.