France, Germany to gain most from European farm support

All 28 Member States of the European Union (EU) are set to receive substantial aid worth EUR420 million (US$470 million) allocated in a fair, targeted and effective way to address problems in the dairy and pork sectors, while allowing Member States maximum flexibility in targeting the aid, said EU Agriculture Commissioner Phil Hogan, when he presented the details of the package announced recently to support European farmers. Other measures include new Private Storage Aid schemes for dairy and pig meat and the possibility of advancing direct payments.
"This is a comprehensive, decisive and robust support package. It is a significant statement of support by the Commission for European agriculture,” he told EU agriculture ministers. “The difficulties being experienced throughout the EU differ in emphasis from Member State to Member State and so the package is constructed in such a way that it responds to those different challenges and, at the same time, provides Member States with the maximum flexibility to tailor aid to their particular needs.”
Of the targeted aid, Germany and France are the main beneficiaries of this targeted aid, receiving sums of EUR69.2 million (US$77.6 million) and EUR62.9 million (US$70.6 million), respectively. Explaining how the amounts for each country – the so-called “national envelopes” - were arrived at, Hogan explained that 80 percent is aimed at the dairy sector to reflect the significant drop in dairy prices over the past year and that it was allocated based on the milk quota for each member state in the last quota year. The remaining 20 percent will ensure additional assistance for farmers hit by the fall in pig meat prices, the impact of the Russian ban, very low milk prices and this summer's drought.
EU members are to be given maximum flexibility on how they allocate their own national envelope. Additional state aid will also be allowed to help farmers’ cash flow, Hogan said, as long as it supports the measures taken under the targeted aid.
Hogan went on to explain the proposed private storage aid to stabilise affected markets for skimmed milk powder, cheese and pig meat. The aid rate for skimmed milk powder will be increased by over 100 percent and the storage period will be fixed for a year. The new PSA scheme for cheese will provide for a total amount of 100 000 tonnes to be broken down by EU member state, based on their respective cheese production;  any unused allocations will be available for redistribution after 3 months to those members that wish to make greater use of the scheme.
Originally foreseen as a ‘classical PSA scheme’, the new scheme for pig meat will include some low-value cuts, including fresh lard, according to Hogan. He added that efforts will be stepped up to address with Russia what he called “the unjustified ban” on some products on SPS grounds.
As well as announcing that EUR30 million (US$33.7 million) will be devoted to ensuring that EU milk will made available for the nutritional needs of refugees and an investigation of the operation of the whole food chain, Hogan confirmed that additional funding will be provided for the promotion of dairy products and pig meat. The new promotion policy, which enters into force on December 1, 2015, will make it easier to access funding for promotion.