The European Court of Auditors (ECA) has launched an audit on the exceptional market measures used by the European Commission as a reaction to the dairy market disturbance following the Russian embargo (Aug 2014) and the end of the dairy quota regime (April 2015) to 2017. These measures included:

• Voluntary Production Reduction Scheme 2016-2017
• Increasing the Public Intervention Stock Ceiling for SMP
• Extending Private Storage Aid schemes
• National Aid Envelopes, of which Ireland was allocated €11.1 million, which was spent on the Agriculture Cash Flow Support Loan Scheme (a scheme providing low-cost flexible working capital finance to farmers)

The ECA in their report will assess whether these measures, which in total cost approximately €740 million, were properly designed and if they had the intended effect.

Audit visits will take place in four countries including Ireland (as well as France, Italy and Finland) to examine how the measures were put into practice and a survey will be sent out to farm organisations across the EU. The audit will also examine whether the Commission and Member States are now better prepared for dairy market disruption.

ICOS’s response to the survey will question the effectiveness of the Voluntary Production Reduction Scheme, which has since been hailed as the successful key to the market turnaround in 2017 and MEPs have sought to formalise the scheme permanently within the incoming CAP. However, data indicates that production across most of the EU had started to reduce well ahead of the introduction of the scheme and it is likely the case that money from the scheme would have gone to those who already reduced output and would have continued to do so.

By Alison Graham – European Affairs Executive