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Brussels, 28 October 2009

Milk: Commission temporarily allows Member States to pay farmers up to €15,000 in state aid

The European Commission today agreed to allow Member States to pay farmers a one-off payment of up to €15,000 in state aid. The move forms part of the Commission's ongoing efforts to stabilise incomes for dairy farmers, but is of course open to farmers in all sectors. The decision amends the Temporary Crisis Framework, adopted by the Commission in January 2009, which already provides for various aid possibilities to facilitate access to finance for EU undertakings. With today's Commission decision a separate compatible limited amount of aid of € 15,000 for farmers is included into the Framework. This amount can be granted once per undertaking until the end of 2010. Any de-minimis aid already received since the beginning of 2008 has to be deducted from this amount. Aid schemes put in place under this new instrument will have to be open to all primary producers and will have to complement other general crisis measures already put in place by a Member State. The idea of allowing farmers state aid of up to €15,000 formed part of the Commission's Communication on the milk sector of 22 nd July 2009.

"Allowing national authorities to pay farmers up to €15,000 in aid should help overcome the serious cash flow problems which some farmers are experiencing," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "Added to the measures on offer at EU level, I believe this will help our milk producers out of the current difficult situation."

Measures taken previously in the dairy sector

The Commission expects to spend up to €600 million on market measures this year.

The intervention period has been extended until the end of August 2010.

70 percent of direct payments may this year be paid 6 weeks earlier than usual (from 16 October).

As part of the 2003 CAP reform, an additional €5 billion per year was added to the direct payments of dairy farmers to compensate for reductions in intervention prices.

On 19 th October, the Commission announced an additional aid package of €280 million for dairy farmers.

Under the Health Check and the Economic Recovery Package, an extra €4.2 billion is available to address 'new challenges', including dairy restructuring. This comes on top of what is already available in Rural Development policy.

The Commission has also reinforced the School Milk Programme by extending the range of products and the age groups of children covered by the scheme. It has also opened a new round of promotional measures for dairy products.

The High Level Experts' Group on Milk is looking into the medium and long-term future of the dairy sector and will deliver its final report by the end of June 2010.

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