Milk reduction scheme proves a success

The European Commission’s milk reduction programme has been just about all taken up, with 99% of the target achieved.

There will now be a small second round for those who have not applied, but the scheme is effectively over.

There was interest across all 28 member states, with the uptake greatest in Germany, followed by France, the UK and the Netherlands.

The average volume reduction at farm level was 20 tonnes per applicant, equating to a 16.5% reduction in output.

Translated across the EU this points to a 2.9% reduction in milk deliveries in the final quarter of this year, compared to last year.

It is not clear whether this will have an impact on prices, and this will be hard to calculate because global dairy markets are improving.

However the scheme was one-off, put in place by the commission largely for political reasons, meaning people will see it as a measure that may or may not have an impact.

The chances of an easing of the greening burden have been further reduced, after the European Commission vicepresident responsible for the EU budget questioned the value for money being delivered by the CAP and greening in particular.

The CAP was an area singled out for criticism, with questions raised about whether the e58 billion annual cost was delivering sufficient ‘value added’ for taxpayers.

There were question marks in particular over whether greening was delivering the promised gains for the environment.

This is a response to questions from green lobby groups about the effectiveness of greening. Meanwhile farm commissioner Phil Hogan has said he will publish initial plans for the future shape of the CAP next summer.

This is about shaping the policy after 2020 – and it will bring home the reality of Brexit, when a huge issue for the other member states is of no interest to the UK.

EU trade commissioner Cecilia Malmstrom has warned that a trade deal with the South American countries that make up the Mercosur group will not be possible without concessions from the EU on access for beef.

This is regarded as a sensitive product, and there has been pressure for it to be excluded from any initial EU offer.

The worry is that two of the main members of Mercosur, Brazil and Argentina, have their sights set on tariff-free access to the EU.

The commission has admitted this would damage the interest of beef farmers.

However the trade commissioner says that with the EU a net exporter of beef, pork and poultry it cannot justify blocking beef in a deal.

The Mercosur trade discussions are due to intensify in mid-October.

While this might not affect the UK, because it will have left the EU before any deal is fully implemented, the Mercosur group is a priority for a high profile post-Brexit deal.

London could be more willing than Brussels to give way over beef and other food products.