Spotlight: EU to release 500 mln euros to support farmers

The European Union (EU) on Monday decided to present a 500-million-euro (about 560 million U.S. dollars) comprehensive package of measures to support European farmers on the heels of Monday's protest here which saw as many as 5,000 farmers gather in the European district to protest falling meat and milk prices.

The package was hammered out by the agriculture ministers from 28 EU member states in an extraordinary meeting aiming to alleviate the crisis caused by Russian food bans.

"The package will allow for 500 million euros of EU funds to be used for the benefit of farmers immediately," European Commission Vice-President Jyrki Katainen said.

Described as "a robust and decisive response" by the vice-president, the package will seek to help the farmers to address cash-flow difficulties, stabilize markets and improve the functioning of the supply chain.

The most significant part of the package will be provided to all member states in envelopes to support the dairy sector, Katainen said. But the national distribution of the aid has not been finalized.

The EU has decided to allow member states to advance direct payments up to 70 percent from Oct. 16. For certain rural development payments, such as agri-environment, organic farming, and animal welfare, EU member states can advance the payments up to 85 percent.

Meanwhile, to stabilize the market, the European Commission is proposing a new private storage scheme for skimmed milk powder and cheese.

The European commission also pledged to open new markets for EU agriculture products.

Phil Hogan, EU commissioner in charge of agriculture and rural development, will have promotion visits to China and Japan later this year and to Mexico and Colombia early in 2016, seeking important opportunities for EU agriculture and opening doors for new exports.

However, the EU executive refused to raise the intervention price for dairy products, a move sought by farming groups and supported by France, Italy, Spain and Portugal.

"At a time when there is a clear market imbalance, increasing the price paid for public intervention will do nothing to restore market balance but would instead create an artificial outlet for EU dairy products," Katainen said.

Earlier in that day, thousands of European farmers and milk producers, as well as a large number of tractors, blocked Brussels' main streets for a mass demonstration. It is the latest move among massive protests around the European countries.

"The last figures show that the prices are not profitable for the most of producers," Fernand Etgen, Minister of Agriculture of Luxembourg, said before the meeting.

For the period from June 2014 to June 2015, the average price for raw milk across the EU fell by 20 percent. At the same time, pig meat export to Russia dropped by 91 percent, from over 740,000 tonnes in 2013 to 65,000 tonnes in 2014.

EU agricultural producers have claimed that some 6.13 billion U.S. dollars have been lost due to the import ban on EU agricultural products imposed by Russia, according to Copa-Cogeca, an EU farm trade union.

Following the growing concern about the economic crisis especially in the dairy and pigmeat sectors, EU member states had been calling for a comprehensive package of measures to support the farmers through this difficult time.

"France and other countries are under pressure," said Stephane Le Foll, French Minister of Agriculture, adding that the crisis is not only harming the French farmers but other producers and other agriculture also affected.

"I have many contacts and they confirmed that there are many difficulties in the milk and the pig farming sectors," Le Foll said.

In August 2014, Moscow imposed a one-year ban on the import of certain food products from the countries that had introduced sanctions against Russia. The food ban was later extended for another year. Endit