* At least 5 nations want urgent action to boost milk prices
* Farm chief says nearly all price support tools activated
(Adds quotes, background)
By Jeremy Smith
BRUSSELS, March 23 (Reuters) - Europe's farm chief refused
demands on Monday by some European Union ministers, who want to
shore up weak milk prices to help struggling farmers, that the
bloc should reconsider dairy market reforms it agreed last year.
At least five countries have called for urgent action and
possibly to delay annual rises in EU milk production quotas,
agreed last November under the "health check" -- or mini-reform
-- of EU farm policy, to give prices a chance to recover.
Speaking at a monthly meeting of EU farm ministers,
Agriculture Commissioner Mariann Fischer Boel said she was not
about to reopen the 'health check', adding that suspending the
one-percent quota increases would not solve the current problem.
"I want to be crystal-clear," Fischer Boel told a news
conference during the meeting. "I am not going to step back ...
on the agreement we made in the health check."
"That idea is dead," she said. "So let's stop this purely
political discussion and concentrate on what we can do with the
economic problems," Fischer Boel said, adding that "blurred
messages" were causing uncertainty among farmers.
Austria, Germany, Hungary, Slovakia and Slovenia circulated
a joint note to the European Commission and other national EU
delegations suggesting several support measures to help milk
prices, saying "unconventional approaches" were now needed.
Dairy farmers have protested in several EU countries in
recent months about low milk prices, piling pressure on national
governments to help in some way. Germany has been particularly
hit and was the driving force behind the five-country paper.
MUCH DONE ALREADY
The Commission has already taken a number of steps to prop
up dairy markets, including the reinstatement of export
subsidies and private storage. It has raised ceilings on volumes
of butter and skimmed milk powder that can be bought into public
intervention stores, to remove supply from the market.
Now, nearly all EU support tools had been activated to prop
up prices, Fischer Boel said. Only two options remained:
subsidies to use skimmed milk powder in feed and for processing
into casein, an important protein found in fresh milk. But
neither would be efficient in current circumstances, she said.
"It's difficult to see what more the Commission could do.
There are a couple of other disposal schemes on the books but it
won't have a major impact on the market," one EU diplomat said.
Fischer Boel said EU milk production was expected to come in
at between 4 and 5 percent below the maximum quota quantities
this marketing year, with the same undershoot in 2009/10.
"This clearly shows that farmers understand that it is
market prices and their cost structure rather than the quota
levels that should determine their production decisions," she
told EU farm ministers at their meeting.
"Quotas are not an obligation to produce but a possibility."
(Editing by James Jukwey)
