EU proposes financial aid for eggs and poultry sector

30/03/06 The European Commission has tabled a proposal to allow the European Union budget to share the cost of market support measures in the eggs and poultry sector. Since the beginning of the recent avian flu crisis, consumption of poultry and eggs has fallen dramatically in some Member States, leading to a sharp reduction in prices. The current regulations governing the eggs and poultry market allow the EU to co-finance compensation measures only in cases where there is a case of avian flu on a farm or where farmers are prevented from moving their poultry because of restrictions imposed on veterinary orders.

There is currently no possibility to provide EU aid to take account of market problems linked to a fall in sales caused by a loss of consumer confidence. Because of the gravity of the current market crisis, the Commission now proposes to co-finance 50 percent of the cost of market support measures linked to a drop in consumption and prices of eggs and poultry. The proposal will be sent to the European Parliament and the Council, hopefully for adoption by the end of April. Once the legal base has been adopted, Member States will have to submit their proposed measures for Commission approval.

“This unprecedented situation can no longer be dealt with using the existing tools,” said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. “That is why we want to extend the scope of the existing regulations to allow EU co-financing of special market measures. Each Member State will then be able to design the measures best suited to its particular situation. In my view, the most sensible approach would be to compensate farmers for measures which temporarily reduce production. I hope that the European Parliament and the Council of agriculture ministers will adopt this measure quickly, to allow the aid to flow as soon as possible.”

Regulations 2771/75 and 2777/75 provide the legal basis for support measures in the eggs and poultry sector. The only market support measures provided for in the regulations are export refunds. The regulations do not currently include the possibility to provide EU financial support to farmers affected by a drastic drop in consumption.

Today’s proposal would extend the scope of Article 14 of both Regulations. This allows for the 50 percent co-financing from the EU budget of veterinary measures (such as slaughtering of chickens) and the 50 percent co-financing of compensation for animal movement restrictions resulting from an outbreak of animal disease on a farm on the territory of the EU.

This would allow “exceptional market measures” to be taken at the request of Member States, to take account of: “serious market disturbances directly attributed to a loss in consumer confidence due to public health, or animal health risks.”

Once Member States submitted their proposed measures, the Commission would have to approve them through the Management Committee procedure.