EU scraps subsidies on dairy exports
(BRUSSELS) - The EU is to end all subsidies on dairy exports, almost 40 years after they were introduced, the European Commission announced Thursday.
The dairy management committee, which brings together experts from the EU and member states, decided to scrap all refunds on exports of butter and cheese, the last to go.
The decision must still be formally adopted but that process is only expected to take days, said Michael Mann, spokesman for EU Agriculture Commissioner Mariann Fischer Boel.
Dairy export subsidies have been progressively scrapped starting with skimmed milk powder in mid-2006.
This is partly the result of Common Agricultural Policy reforms but "mainly the result of extraordinary conditions on the internal market and the world market," the Commission said in a statement, a reference to higher world prices.
The export subsidies were introduced in 1968 to help EU producers sell on the global market where they were not competitive.
The subsidy was based on the difference between the world market price and the higher guaranteed price in the EU.
The mechanism has regularly been denounced by NGOs in the development field as a tool against the world's poorest farmers.
In 2005 the subsidies reached a record 1.14 billion euros (1.52 billion dollars at today's conversion rate) while world prices were low, said Mann.
Higher world prices have rendered the subsidies unnecessary, handily in line with EU farming reforms.
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