EU states disagree over milk quota, optimistic over CAP deal
(BRDO PRI KRANJU) - EU members disagreed Tuesday over a plan to increase milk quotas but remained optimistic they could agree on reform of the EU's common agriculture policy (CAP) by the end of the year.
"I have to say that I'm rather encouraged," EU Agriculture Commissioner Mariann Fischer Boel said at the end of a two-day informal meeting of the bloc's 27 agriculture ministers, hosted by current EU president Slovenia.
She added that the meeting left her with "some confidence that we will be able, together with the upcoming French presidency, to find a solution (for the CAP) before the end of the year."
France will take over the rotating six-month EU presidency from Slovenia on July 1.
The meeting gave ministers a first chance to discuss the European Commission's recent Health Check Proposal, aimed at cranking up production in the farming sector in the face of soaring food prices.
The proposal foresees suppressing some production restrictions such as the milk quota, in place since 1984, reducing certain unjustifiable subsidies and simplifying payment schemes.
But the milk quota has divided member states.
The commission has proposed a one-percentage-point annual quota increase, culminating in the elimination of the quota by 2015.
But some of the bloc's largest milk producers, such as Italy or the Netherlands, have demanded a higher annual quota increase -- by two or three percentage points per year -- while others, like France and Germany, oppose the quota's abolition.
"We have some reservations about the eliminations of the quotas," said French Agriculture Minister Michel Barnier, adding however that an agreement by all 27 member states was still possible by November.
"There is nothing that could not be overcome," he noted.
But he warned that overproduction could have serious consequences for the milk market, which he qualified as "extremely volatile."
France and Germany fear that overproduction could cause a drop in milk prices that would principally affect vulnerable, mountainous regions while strengthening large farms.
The two countries have thus called for additional financial aid to be granted to mountainous regions that could not switch to non-dairy production should prices fall further.
"I don't want us to have only an agriculture industry, I also want to preserve small- and middle-sized farms," said Barnier.
German milk producers staged a milk strike Tuesday, halting deliveries to dairies, to protest what they see as excessively low prices.
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