The Chairman of the ICOS Dairy Committee, Jerry Long attended key meetings in Brussels organised by Copa-Cogeca and the European Commission on dairy markets. The following is a summary of the key points discussed at these meetings held on 2^nd and 3^rd May.

• Article 222 – Voluntary Supply Management

The implementing legislation is now in place allowing producer organisations, inter-branch organisations and co-operatives to voluntary reduce supply, without recourse to EU competition rules. The European Commission confirmed that the measure implemented under Article 222 of the CMO Regulation will be in place for a six month period from April to September. The measure may be extended for a further six months. The Commission also confirmed that under existing legislation, the measure cannot be implemented on a mandatory basis. The vast majority of Member State delegations within Copa-Cogeca have viewed the measure as unworkable in its current guise. Despite advocating for its adoption, it appears that the measure will not be implemented in France. ICOS argued that volatility can only be addressed by the adoption of a range of mechanisms such as fixed price schemes, financial instruments and income deferral tools.

• SMP intervention stocks continue to grow

European SMP stocks continue to increase with over 187,000 tonnes sold into public intervention since the beginning of 2016. The volume limit for purchases at the fixed price increased from 109,000t to 218,000t following a decision by EU Agricultural Ministers on 14^th March.

The necessary legislation was not enacted in time resulting in a tender procedure when stocks reached the 109,000 tonnes limit on 31^st March. A tender was automatically triggered, which closed on the 19^th of April. Over 27,000 tonnes of SMP was offered into intervention during the tender period.

The European Commission accepted all volumes placed through the tender at the fixed price will not deduct these volumes from the new ceiling of 218,000 tonnes. Despite this, it is expected that the new 218,000 tonnes ceiling will be reached by June.

Of note, Belgium, Germany, France and Poland have the lion’s share of SMP product in public intervention. Ireland has sold 13,582 tonnes of SMP into intervention since the start of this year, with private storage remaining an unattractive option for SMP.

• Trade Matters

The European Commission provided an update regarding trade negotiations with third countries. Negotiations with Japan remain difficult, with a recent summit postponed over the opening of agricultural markets. The Commission reported that significant progress was made on non-tariff barriers with China during a recent trade visit by Commissioner Hogan. Trade negotiations are also progressing with the Philippines and Malaysia. The EU-US (TTIP) and Mercosur (South America) trade negotiations are most controversial, with the latter at a more advanced stage.

Eamonn Farrell

Agri-Food Policy Executive