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EU Amends SMP Interventions To Support Markets

Published on Feb 2 2018 12:45 PM in Supply Chain tagged: Dairy / EU / European Council / Skimmed Milk Powder

EU Amends SMP Interventions To Support Markets

The European Council has introduced a temporary quantitative limitation for buying-in skimmed milk powder (SMP) at a fixed price at zero tonnes for 2018 as a measure to stabilise the dairy market for the year.

As a consequence of the difficult situation in the dairy markets, public intervention stocks of SMP in the EU rose to almost 400,000 tonnes in 2017, thereby risking severe pressure on the market, with a negative impact on dairy prices, according to the Council.

The period in which public intervention is open for skimmed milk powder starts on 1 March and ends on 30 September every year.

In order to avoid a drop in prices and a consequent worsening of farmers' standards of living, the Commission proposed and the Council decided to forego the automatic buying-in of SMP in a context in which stocks are already very high, according to the Council.

By setting the quantitative limit at zero for 2018, buying-in at a fixed price will not be activated automatically, the Council said.

However, the safety net will still function, as the EU will continue to be able to buy-in SMP through a tendering procedure, and to decide on a case-by-case basis how much to buy and at what price level.

Stabilising Dairy Markets

“The Council decided today to intervene to stabilise the dairy markets in 2018,” said Rumen Porodzanov, minister of agriculture, food and forestry of Bulgaria and president of the Council.

“This is in line with our commitment to keep track of market developments and to make sure that the safety net is used in a timely and prudent manner, not just to react to market disruptions, but also to avoid them in the first place whenever possible.”

The new measure is part of the Common Market Organisation (CMO), a set of rules which regulates agricultural markets in the EU. This includes setting the parameters for intervening on agricultural markets through market support instruments (e.g. public intervention and private storage, emergency measures) and sector-specific support.

© 2018 - Checkout Magazine by Kevin Duggan

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