In Brussels on September 7, Europe’s agriculture ministers agreed a support package worth EUR500 million (US$559.3 million) as an immediate aid to EU farmers experiencing serious economic difficulties.

“This package will allow for EUR500 million of EU funds to be used for the benefit of farmers immediately,” said Jyrki Katainen, vice president, after an extraordinary Council of Agriculture Ministers. “This is a robust and decisive response. This response demonstrates that the Commission takes its responsibility towards farmers very seriously and is prepared to back it up with the appropriate funds. This is particularly important, given other competing budgetary demands.”

Although the scale of the difficulties varies between Member States, the Ministers recognize the difficulties being experienced by European farmers in some sectors, particularly in dairy farming, as the result of the ban on imports from the EU, the end to milk quotas, and drought across much of the continent in recent months.

Their response aims in the short term to address the cash flow difficulties farmers are facing, stabilize markets and, in the longer term, to review the functioning of the supply chain.

Most of the package will be provided to all Member States in envelopes to support the dairy sector, with regard to the states and farmers that have been most affected by the market developments.

Copa and Cogeca -- the associations representing European farmers and agricultural cooperatives -- have reacted to the proposed aid package by saying it falls far short of the requirements to remedy the drastic situation hitting agriculture markets caused mainly by the Russian crisis, which is costing EU producers EUR5.5 billion (US$xx billion) annually.

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Support for the pig meat sector

With the aim to stabilise the European pork market, the Commission is to propose a new Private Storage Aid (PSA) scheme for pig meat.

Furthermore, a specific part of that enlarged promotion budget for 2016 will be reserved for the pig meat sector. There is a proposal to reform the promotion policy to raise the co-financing rate and to include generic pig meat promotion in the internal market among the products eligible for this support.

Copa and Cogeca welcomed the PSA scheme for pig meat but called for higher compensation and the inclusion of pig fat and lard. They also want export insurance covering trading risks to be included in the new promotion programme.

Germany’s pig producers’ organisation, ISN, is highly critical of the new PSA proposal, saying the previous scheme last year did not work as it held back price rises when the market began to recover, and that it was a waste of money and devalued the product.