April 20, 2006

EU member states appeal to slow down cuts on diary subsidies

13 member states in the EU have challenged the European Commission's bid to accelerate dairy export subsidy cuts towards their promised elimination by 2013.

Ireland, France, Hungary, Spain and Italy are among countries in the EU opposing the Commission's plans, which would allow European food to be sold in world markets with reduced subsidies.

Critics of export subsidies within the Commission say subsidies puts EU products at a competitive disadvantage as it obliges producers to sell their products at higher prices.

Dairy processors, however, are appealing for a slower pace of subsidy cuts.

Irish authorities have called on Agriculture Minister Mary Coughlan to work more actively for higher export refunds, after milk price cuts shocked dairy farmers last week.

The Irish Farmers Association say a state aided capital investment programme, cost cutting measures and new marketing and promotion initiatives need to be in place before their products are weaned off subsidies.