14 Apr 2016
NEW EU STATE AID ALLOWANCE CAN SUPPORT DAIRY FARMERS IF DELIVERED PROMPTLY BY GOVERNMENT – O’LEARYDairy, Economics, Farm Business & Credit
IFA National Dairy Committee Chairman Sean O’Leary has said discussions at the EU Agriculture Council this week in Luxembourg have given some additional clarity as to how some of the EU support measures decided last month would be implemented, especially on intervention.
He said the new temporary state aid allowance was meant to help with farmers’ stressed cash flow, and he had used this week’s meeting of the Dairy Forum Sub-Group to insist that Minister for Agriculture Simon Coveney and Finance Minister Michael Noonan ensure farmers benefit fully from the EU Council decisions.
“This new state aid provision exceptionally allows member states to give supports out of national funds up to €15,000 per farmer per year over three years which would otherwise have been prohibited,” he said.
“The new measure provides some options aimed at facilitating production reductions or even closure of production capacity. But it also allows member states to offer loans or guarantees to help farmers ‘bridge liquidity gaps’,” he said.
Sean O’Leary said the Ministers for Agriculture and for Finance must explore three possible uses – not necessarily mutually exclusive – for this aid:
1) The provision of interest free/cheaper short term finance to “bridge liquidity gaps” (cash flow);
2) The provision of a 1-year moratorium on superlevy repayments – as the EU has already received the full payment from the member states; and,
3) The provision of tax measures aiming at helping farmers to better manage highly volatile incomes, as proposed by IFA.