France will supplement a set of European subsidies announced last month to encourage milk producers to cut output and reduce overproduction to avert a collapse in prices, Agriculture Minister Stephane Le Foll said on Tuesday.
The decision comes after thousands of producers protested for more than a week against Lactalis, the world’s largest dairy group, demanding higher prices for their milk. The two parties struck a deal earlier in the day.
The European Commission announced a 500 million euro ($557.5 million) aid package in mid-July to tackle a long-running crisis in farming, notably in the dairy sector, where Brussels aims to reverse a boom in milk output after the scrapping of production quotas.
The Commission’s package included 150 million euros of aid to reduce milk output and 350 million euros of wider subsidies, 49.9 million ($55.6 million) of which is for France.
France decided to supplement this by a similar amount, Le Foll said on Twitter.
Under the EU plan farmers will receive a subsidy of 140 euros for each tonne of milk not produced. France will add an extra 100 euros per tonne, for a maximum volume of 5 percent of the farmer’s initial production, he said.
The government fears that subsidising a reduction in output of over 5 percent may penalise the cattle industry, which is already in crisis. Milk producers may be tempted to slaughter their animals to cut output, pressuring meat prices, a ministry official said.
Source: Reuters
