52,000 farmers from 27 EU countries participate in Milk Production Reduction Scheme

Milk Production Reduction Scheme was announced by Hogan as part of a €500m aid package for the dairy sector
Milk Production Reduction Scheme was announced by Hogan as part of a €500m aid package for the dairy sector

€150 million of the Milk Production Reduction Scheme has been almost fully subscribed (98.9 %).

Applications made offering to reduce production in the final quarter of 2016 by 1.06 million tonnes (of the 1.07 million tonnes available).

EU Agricultural Commissioner Phil Hogan has today welcomed the news.

The Commissioner noted that signs of recovery are already evident
The Commissioner noted that signs of recovery are already evident

The Commissioner said that today's figures showed the scheme has proven to be both “very attractive and successful.”

“It fully meets our expectations, I am confident that this measure, allied to others included in the July and earlier packages, will contribute further to an already stabilising market situation in the European dairy market,” Mr Hogan said.

“I am particularly pleased at the level of participation among the main dairy producing Member States.”

The largest number of participating dairy farmers are in France (13,000) and Germany (10,000)
The largest number of participating dairy farmers are in France (13,000) and Germany (10,000)

Signs of recovery ‘already evident’

The Commissioner noted that signs of recovery are already evident, particularly in certain commodity prices, but reiterated that his objective was to see "improving market sentiment translated into higher farm-gate prices to the benefit of producers."

The notifications received by the Commission show that over 52,000 dairy farmers in 27 Member States have applied to participate in the scheme, with offers to reduce production in the final quarter of 2016, relative to the same period last year.

The volume reductions offered vary from producer to producer, but average 20 tonnes per applicant.

In terms of production, this represents an average reduction of 16.5 per cent, which is a 2.9 per cent reduction in total milk deliveries in the final quarter of 2016.

At the end of the three-month period, farmers will have 45 days (to approx. mid-February) to provide proof that they have reduced production and, therefore, confirm eligibility for the aid payment of €14 per 100kg of "reduction".

Low UK take-up

The national take-up also varies considerably, with total volume reductions ranging from 286,000 tonnes in Germany and over 100,000 tonnes in France, and in the UK less than 1000 tonnes.

The largest number of participating dairy farmers are in France (13,000), Germany (10,000), Ireland (4,500) and Austria and the Netherlands (both 4,000).

In percentage participation rates, Ireland has a participation rate of 24 %, followed by Belgium and the Netherlands (both 22 %), France (19 %) and Portugal (17 %).

Because the overall volume offered was marginally less than that available, there will be a second round for the remaining 1.1 per cent (11 407 tonnes) for the period November 2016 to January 2017.

This second round will be open only to those who did not apply for participation in the first round.

The deadline for the receipt of complete applications for the second round is 12 October 2016.

The Milk Production Reduction Scheme was announced by Commissioner Hogan at the July Agriculture Council as part of a €500 million aid package for the dairy sector.

It included an emergency support package worth €350 million with designated envelopes for each Member State, and a number of market measures.