October 27, 2009

The decision of the European Parliament to put another EUR280 million (US$417 million) into an emergency fund to help beleaguered milk producers is more harm than help, according to Member of the European Parliament (MEP) Alyn Smith.

Voting against the move, Smith said the funds would now be controlled by the common market organisation, thus giving hugely more power to the European Commission.

Calling the move "blackmail of the worst sort", Smith said the funds should have been put into better use.

The new proposal replaced the previously agreed milk fund, due to come into force in January. This would have directly assisted producers and did not involve giving power to the Commission.

Smith said the European Commission is as much to blame for the crisis and to massively increase its powers in this way is more likely to worsen the dairy sector's problems in the long term.

Smith cited concerns that there were controls over how the additional cash would be used, although a number of member states have indicated they would not use them for direct aid.