EU might extend support to farmers hit by dairy crisis: commissioner

The European Union (EU) will consider taking additional measures to support farmers hit hard by the dairy and pig meat crisis, said EU agriculture commissioner Phil Hogan Tuesday.

"We will evaluate the implementation of the measures already in place to see what more we can do within the financial resources and the legislative framework we operate," said Hogan, following the informal meeting of EU ministers for agricultural development held in the Dutch capital.

"The situation in the dairy market is overproduction, which has caused the prices to fall and has brought many farmers in a difficult situation," said Dutch Minister of Agriculture Martijn van Dam, whose country holds the current EU presidency.

Agriculture ministers from the 28 member states of the EU gathered in Amsterdam on Tuesday to discuss Dutch proposals on the future of agricultural policy. Issues related to the current difficulties faced in several agricultural sectors, and in particular in the pig meat and dairy sectors, also emerged.

"We will evaluate the effect of these measures, whether the package is working. Then we will see whether we need additional measures," the Dutch minister said.

Discussions on additional measures to dairy and pig meat farmers will be held end of June at the next meeting of EU agriculture ministers.

The Commission, or the EU's executive arm, has already introduced 23 measures since last September to support farmers in crisis. The latest package was introduced in March, such as placing products into storage to reduce surplus supply, allowing producers to freeze milk production, relaxing EU limits on state subsidies and doubling intervention ceilings for skimmed milk powder and butter.

Implementation of these measures is pending in a number of countries. "Eight countries have not taken advantage of the measures," the commissioner said. He suggested that extending the aid package might not necessarily include further financial assistance. The European Commission has mobilized more than 1 billion euros (1.11 billion U.S. dollars) to help farmers since the Russian ban was imposed.

In addition, the EU ministers are considering developing other financial instruments to assist farmers, van Dam said. Also the creation of an EU framework to give a fair price to the farmer with the involvement of all actors in the food chain would be under consideration, Hogan noted.

European farmers have been in a price crisis for nearly two years. A series of factors, including slowing market demand, the abolishment of milk quotas, and a Russian embargo on Western products in response to sanctions over the Ukraine conflict, has pushed down prices for pork and milk.

"The situation in the pig meat sector is improving," said Hogan, attributing such a development to a number of factors including the opening of new market opportunities in third countries and in particular in China.

In the last two weeks, prices of pork have increased by four cents a kg, according to the commissioner. "If this trend continues we may have turned the corner in the crisis," Hogan said.

The EU ministers also discussed whether the Common Agriculture Policy (CAP) should be reformed, an issue suggested by the Dutch presidency. "We cannot afford to take agriculture for granted. There are challenges ahead," said the Dutch agriculture minister.

The Dutch wants a debate on the reform of the common agricultural policy, which consumes a third of the EU budget (54.6 billion euros). They call for further simplification and deregulation and suggest that food policy is becoming more important with food-chain power relations shifting toward consumers and distributors, and that this should be reflected in the CAP due to replace the current one in 2020.

According to van Dam, EU ministers expressed different views on reforming the current CAP, but there was common ground on three aspects. Namely, that CAP should be there to support the farmers' income after 2020, to secure that rural areas remain vivid and that innovation is needed to address future challenges, including the contribution of agriculture to agreements on climate change and sustainable development.

In a different tone, Hogan stressed that "some ministers said there is some reform fatigue in relation to the fact that we just had a CAP reform and more work has to be done on the proper implementation of the policy we currently have before we start down the road wondering whether we should make substantial changes to the existing policy."