Coronavirus: EU proposes €80m agricultural support package

The European Commission has proposed that private storage aid could be made available agri-food products
The European Commission has proposed that private storage aid could be made available agri-food products

British farmers could benefit from measures included in a new €80m package of support for the EU agri-food sector impacted by the Covid-19 crisis.

The UK could apply to take part in one measure included in the support package - the private storage aid (PSA) scheme.

The European Commission proposed to grant private storage aid for dairy and meat products, such as beef, sheep and goat meat.

While the UK left the bloc on 31 January 2020, it still participates in certain policies which will expire at the end of the Brexit transition period on 31 December.



The PSA scheme would allow the temporary withdrawal of products from the market for a minimum of 2 to 3 months, and a maximum period of 5 to 6 months.

It would lead to a decrease of available supply on the market and rebalance the market on the long-term.



For the dairy sector, this primarily means the opening of private storage aid for skimmed milk powder, butter, and cheese, AHDB dairy analyst Katherine Jack explains.

The allocation for how much UK product would be eligible for this is yet to be announced, though some reports suggest that for cheese it would be around 4.5 thousand tonnes.

Other measures announced include an exceptional derogation from EU competition rules for the milk sector, as well as flowers and potatoes.

This means the milk sector will be allowed to collectively take measures to stabilise the market, for example, collectively planning milk production, Ms Jack explains.

The European Commission are also allowing flexibility in the EU school milk, fruits and vegetables scheme to allow reprioritisation of funding towards crisis management measures.

The EU aims to have these measures adopted by the end of April, at which point full details of the proposals will be revealed.

The Ulster Farmers’ Union (UFU) welcomed the proposed support package for the agri-food sector as an 'encouraging first step'.



The union's president Ivor Ferguson said: “The agri-food sector has taken a serious hit due to the coronavirus pandemic and all financial support to help sustain our industry is welcome."

However, since the package is mainly to encourage the storage of dairy and red meat products, it does not provide direct support for farmers, he warned.

“The Commission has stated that the storage aid will fund processors, allowing them to store products for a minimum of two months and a maximum of seven.

"The thinking behind this is that it will allow the market to find a better balance after experiencing a serious plunge in product demand when the hospitality sectors closed due to Covid-19.

But Mr Ferguson said the market downturn is 'most acute' and is already being felt by farmers: "We hope that this proposed package by the Commission will deliver, improving farmgate prices and having a knock-on-affect on family run farming businesses.

"However, it is important that the Commission monitors the effectiveness of the measures and be ready to come forward with additional measures as necessary.”