EU pledges emergency limit on milk supply

Farmers take to the streets as EU farm ministers meet in Brussels.

The EU on Monday backed temporary cuts in milk production in an emergency move intended to tackle excess supply.

Overproduction of milk has been a problem since EU quotas were abolished in April 2015, triggering a collapse in prices across the bloc.

The move announced Monday is an emergency exception to rules guaranteeing economic competition. It was one of a number of measures announced by the European Commission for the dairy, pig meat, fruit and vegetable sectors in response to concerns about low prices, which many farmers say are driving them out of business. The moves were unveiled after a meeting of agriculture ministers in Brussels.

Phil Hogan, the European commissioner for agriculture, said there was “a temporary difficulty in demand and supply. I hope these measures will help to bring more stability, but there is no silver bullet.”

To address the concerns of farmers, the EU for the first time invoked Article 222 of the Common Market Organization Regulation. This allows for measures, in times of “severe imbalance in markets,” which would otherwise break EU competition rules. They will be valid for six months.

“What’s happened I think is acceptable to us,” said Simon Coveney, Ireland’s agriculture minister. “They’re allowing countries on a voluntary basis to pay farmers to produce less milk, in simple terms. But countries have to use their own domestic budgets to do that, rather than EU funds, which I think is welcome.”

About 100 protesters gathered outside the agriculture ministers’ meeting in Brussels, with some venting their frustration on the doorstep of agriculture lobby group COPA-Cogeca. Since 2014, global milk prices have fallen nearly 40 percent because of overproduction, weaker Chinese demand and a trade ban with Russia.

Martijn van Dam, the Dutch agriculture minister who chaired the meeting, said a €500 million aid package agreed in September to stabilize markets and address farmers’ cash-flow difficulties has had some effect, but added that “its implementation needs more attention.” Lobby groups argued that last year’s plan did not go far enough.

“We agree on the need to have more response from the EU. Actions should be based on solidarity, and reduction of supply is needed,” Van Dam said.

Other measures announced Monday include doubling how much skimmed milk powder and butter that authorities can buy and store off the market (a process known as intervention), and more money to promote EU agricultural produce locally and outside the bloc.

This article was updated with comments from the Irish agriculture minister.

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