Michael Creed (Cork North West, Fine Gael)
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The second package of measures to deal with the ongoing difficulties faced by farmers in the dairy and other sectors, which was agreed by the Council of Agriculture Ministers in March, includes the making available of more flexible State aid support. This flexibility is being allowed by the Commission under paragraph 30 of the EU Guidelines for State aid in the agricultural and forestry sectors. This provision allows the EU Commission to assess, on a case by case basis, any aid measures not specifically covered by the current State aid instruments and to determine whether such measures are compatible with the State Aid provisions in Article 107 (3)(c) of the Treaty on the Functioning of the European Union (TFEU), i.e. to determine that any aid to facilitate the economic activities involved does not adversely affect trading conditions to an extent contrary to the common interest.

The Commission has stated that it will use the exemption in paragraph 30 to allow Member States to provide support to farmers up to a maximum amount of €15,000 per farm this year in circumstances where they either:-

(i) make a commitment to freeze or reduce production compared to a given reference period, or

(ii) use the funds to bridge a liquidity gap.

Aid would be granted in the form of direct grants, loans or guarantees in the case of freezing/reducing production, and in the form of loans or guarantees in the case of liquidity assistance (remunerated in the form of an interest payment). The latter could also be provided in grant form if accompanied by a commitment to freeze or reduce production.

Given that the measures are assessed on a case by case basis by the EU Commission, exact criteria to be met by farmers are not determined in advance. Instead the Commission assesses any proposals made by Member States to determine whether they meet the compatibility test with the State Aid provisions in the Treaty.

I do not plan to avail of the option to provide national funding to support the freezing or reduction of milk supply compared to a given reference period. On the question of liquidity, I am continuing to keep this option under review in the context of my Department’s ongoing engagement with financial institutions concerning the provision of flexible finance to farmers.