Milk price crisis: Parliament gives go ahead to new measures

New proposals to help EU farmers through the milk price crisis were backed by Parliament on Thursday.
Parliament backed two new legislative measures put forward by the Commission at an Agriculture Committee meeting on Monday, one to allow the Commission to take counter-measures faster in response to serious market disturbances, and the other to enable Member States to levy extra funding to help restructure the dairy market.

These proposals, adopted with 480 votes in favour, 109 against and 27 abstentions, followed Parliament's call, in a resolution approved at the September plenary session, for more action to remedy the milk price crisis.

Agriculture Commissioner Mariann Fischer Boel told the committee on Monday that she agreed to Parliament's request for a special fund for the dairy sector. However, she proposed it should have €280 million, compared to €300 million proposed by Parliament's Budget committee.

On Thursday, in a separate vote, Parliament supported, in the budget procedure, the establishment of the €300 million fund.

More powers for Commission to intervene in the market

One of the legislative measures backed by MEPs was a request to enable the Commission to adopt counter-measures quickly in the event of serious market disturbances in the dairy sector (article 186 of the single CMO Regulation). This possibility already exists when prices change significantly in other farm sectors, such as meat and sugar. MEPs approved an amendment to make this measure temporary, until 2010.

Mrs Fischer Boel explained that one of the things that the Commission could do, if the new powers are granted, is to fund private storage of various products including cheese, as  Parliament urged in September.

A new quota system to finance restructuring

The second proposal would give Member States a share of the "surplus levy" currently charged on production in excess of national quotas, which they could use to help restructure their dairy sectors. This share would be created by lowering the threshold at which farmers must pay levies. The balance of the surplus levy would continue to be levied by the EU, paid into the EU budget, and used to restructure the sector across the EU, as it is today. 
 
National governments are not obliged to levy the additional fine and the measure will only be temporary, as it runs from April 2009 till April 2010.

For the new measures to take effect, the Council's approval is needed. The ministers agreed at a meeting in Luxembourg on Monday to adopt them in November.