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Independent.ie

Friday 9 December 2016

Ireland gets €11m from new EU farm aid package

Farm bodies call on Minister to match funding as milk suppliers take another hit

Published 20/07/2016 | 02:30

The aid deal comes as Irish dairy farmers are facing a €3m hit due to a significant drop in milk protein levels through June
The aid deal comes as Irish dairy farmers are facing a €3m hit due to a significant drop in milk protein levels through June

IRELAND has been allocated €11m from the latest EU farm aid package which contains measures to curb milk production.

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But while some countries - including France and Germany - have been pressing strongly for milk supply controls, the bulk of the €500m package announced yesterday will be allocated to individual countries to put their own relief measures in place.

Ireland will get €11.1m from the package which is mainly focused on milk producers - but there is also scope to assist other livestock sectors.

The aid deal comes as Irish dairy farmers are facing a €3m hit due to a significant drop in milk protein levels through June. Milk prices remain in the low 20c/l range.

Agriculture Minister Michael Creed said the two-pronged approach to dealing with the milk price was important as Irish officials had vigorously contested moves to link the aid package solely to milk supply control measures.

"We did not want the package to be focused exclusively on production discipline, although there were strong demands for that from member states," said Mr Creed.

"I think it is important recalling that over 40 years quotas didn't serve us well," he said, pointing out the price collapse in 2009 occurred despite quotas. "Quotas are themselves not an insulation against market forces."

He said the flexibility built into the aid package would allow the Department of Agriculture provide relief to farmers suffering cash flow issues.

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The main measures in the EU aid package include:

€150m to support voluntary reduction of milk output. This measure will be administered from Brussels and can be accessed by dairy farmers in any EU country

€350m conditional aid measures to be administered by member states

An extension of the private storage aid schemes to February 2017 to take more skimmed milk powder off the market

Fast-tracking 70pc of direct payments and 85pc of rural development payments to farmers from October

It is understood the Agriculture Department plans to hold discussions with farm organisations and stakeholders on the best ways to spend the €11.1m conditional aid package.

This latest move brings to €1bn the amount allocated by the EU in farm relief measures over the last year.

The €13.7m allocated to Ireland in the last round was matched by national funding to provide the dairy and pig sectors with €27.4m in aid.

EU Agriculture Commissioner Phil Hogan confirmed member states would be allowed to match the latest funding with national funds. However, it is unclear at this stage whether Ireland will be committing to match the latest €11.1m cash injection.

Recovery

"Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work," said Mr Hogan.

ICMSA president John Comer said the success or failure of the package would ultimately depend on the delivery of an increased milk price.

He called on the Irish Government to fully match the EU package and support dairy farmers in an extremely difficult time.

Mr Comer said that as the €150m voluntary supply reduction scheme operated at EU level, all farmers would have the option to take part in the scheme without preventing others from expanding if they wished.

IFA president Joe Healy urged Minister Creed to match the €11.1m funding and to use it to reduce the cost of short-term borrowing for farmers in all sectors.

The IFA's dairy chair Sean O'Leary said the €150m to incentivise production reduction must not disadvantage Irish farmers who have expanded.

"The extension of skimmed milk powder intervention and storage aid should send a positive message on markets at a time when prices are already starting to firm in response to easing global and EU output," said Mr O'Leary.

However, the ICSA president Patrick Kent questioned the delivery of a further rescue package for dairy farmers while beef farmers continue to seek equal treatment for their own sector.

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