On 29^th January, EU agricultural ministers voted to remove the standard 109,000 tonne ceiling for the automatic buying-in of SMP stocks into public intervention at a fixed rate of € €1,698/tonne. The change to intervention rules applies for 2018 only.

Instead, when public intervention opens on March 1 this year, it will only operate via a tendering procedure, i.e. it will be decided on a case-by-case basis how much stock is bought and at what price level.

Ministers made this decision in order to avoid a further increase in intervention stock levels, which currently stand at 378,578 tonnes, following the difficult market situation in 2015/16.

More information on the decision can be found on the European Council website:

http://www.consilium.europa.eu/en/press/press-releases/2018/01/29/skimmed-milk-powder-council-modifies-rules-on-public-intervention-to-help-the-market/

Meanwhile, the French Government presented a proposal at the recent Council of Agricultural Minister on 29^th January regarding the disposal of skimmed milk powder stocks. The paper states that “solutions are now urgently needed for the disposal of this public stock of SMP without additional disruption to dairy markets”.

The paper outlines a number of options for the disposal of SMP stocks including the following:

1. Disposal by auction: The paper recognises that this is the only measure to have been implemented to date. It reiterates that the auction process should continue in a prudent manner, given the risk to undermining the market for fresh product.
2. Animal feed (other than Calf Milk Replacer (CMR)): The paper identifies SMP as a good source of protein and energy for animal feed. The animal feed chain, particularly using SMP as a replacement for protein rich plant materials should be considered with a specific scheme for disposal by auction for these outlets should be looked at in detail. In relation to the milk replacer market, the paper notes that there is a risk that SMP from the market will be replaced by SMP from intervention and there is also a risk of destabilising the whey market, which is increasingly used in CMR.
3. Support for the most deprived: The paper calls for the practical implementation of Chapter IV of Regulation 2017/1479, which permits the disposal of products from intervention for the scheme for food distribution to the most deprived.
4. Combating undernutrition: The paper identifies the enrichment of meals using SMP as a straightforward and effective solution, targeted at hospitals and retirement homes.
5. Determining the technical characteristics of stocks: Finally, the paper recommends that operators should be allowed to inspect and take samples at their own expense before submitting a tender.

Eamonn Farrell

Agri-Food Policy Executive