European Commission announces emergency market support measures for the milk sector

The European Commission has announced today that it will open Private Storage Aid for butter, Skimmed Milk Powder (SMP) and certain cheeses in order to alleviate the impact of Russian restrictions on imports of EU dairy products and to limit the negative effects on the internal market.

The Commission has also confirmed that the period for public intervention of butter & SMP will be extended until the end of the year.

EU Agriculture & Rural Development Commissioner Dacian Cioloș explained:

“Price signals on the European dairy market show that the Russian ban is starting to hit this sector. In a number of Member States export earnings are being lost and new outlets need to be found. The European dairy sector needs time and help to adapt so I am announcing today targeted market support, focusing on milk powder, butter and exported cheeses If needed, further measures will follow.”

The Commissioner went on to say:
“In the coming days I will also present to Member States and the European Parliament a first full analysis of the short and medium term impact of this Russian ban on all major European agri-food sectors, together with an overview of the policy options. Again, my message to EU producers today is clear: Where material risks of market destabilisation appear, I will continue to use the new CAP to act pre-emptively to stabilise the market.”

The Commission will provide Private Storage Aid for butter and SMP to cover the daily costs of storing these products for 3-7 months. A draft implementing Act will be presented to the Committee next week for a formal vote.

Given the importance of certain cheeses in the value of EU exports to Russia (worth close to 1 billion € in 2013), the Commission is wanting to extend this measure to cheeses. The rules on PSA for cheese and the extension of the intervention period will be regulated by a Delegated Act which the Commission will table in the near future under the emergency market rules established in last year’s CAP reform.

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