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EU Farm Ministers met in Luxembourg on Monday, 11th April. The European Commissioner for Agriculture, Phil Hogan briefed Ministers on the progress being made by the European Commission concerning the implementation of support measures agreed at the previous Council meeting held on 14th March last.

Of note, the European Commission has finalised legislation to give effect to the introduction of Article 222 measures on supply control and a relaxation of EU state aid rules. The European Commission is also in the process of finalising additional legislation, which will double the threshold amounts of SMP and butter placed into public intervention at the fixed price.

Article 222 and State Aid Rules

Producer organisations and co-operatives in Europe can now voluntarily reduce or freeze supply, without competition implications. Article 222 of the CMO Regulation has been utilised as a legal base. Funding may be provided by National Governments to milk suppliers who cut their production based on a reference point. The alteration to EU State Aid rules will provide Member States with the necessary scope, should processors decide to avail of this measure. The introduction of voluntary supply side measures raises more questions than answers, specifically related its feasibility, implementation and monitoring.

According to Commissioner Hogan, state aid rules will be flexibly applied by the Commission services. The easing of EU State Aid rules also allows for measures designed to provide access to temporary finance schemes to bridge the liquidity gap. In theory, this permits the Irish Government with the opportunity to aid farmers up to €15,000 per annum, perhaps through taxation measures, loans or grants.

While ICOS welcomes the temporary relaxation of EU State Aid rules, as a means to help farmers through a difficult period, it is concerning that particular Member States due to either political circumstances or financial reasons may support their farmers to a greater extent than other Member States. This may be viewed as a dilution of the “common” aspect of the CAP, which after-all is Europe’s longest public policy.

Juncker Funds

Finally, the Council also received a briefing from the European Commission Vice President, Jyrki Katainen on the so-called “Juncker Funds” or European Fund for Strategic Investments. The Commission informed the Council that between 2 and 9 billion euro may be available in the area of agricultural investment. Agri based renewable energy projects in Finland, France and Denmark have already been approved, with the Vice President indicating that a “dairy” project will be announced in the coming weeks.

The market situation will be discussed further by Ministers at the June Council (27-28 June).

Eamonn Farrell

Agri Food Policy Executive