The European Commission has announced plans to reintroduce dairy export subsidies in a move designed to bolster struggling European dairy exporters.

Dairy producers have struggled to maintain profitability and compete on the world market as global commodity prices have dropped.

Increased world supply and reduced EU demand have forced European dairy prices down, causing a number of major dairy processors to cut the amount they pay to their farmer-suppliers for raw milk.

Export subsidies, which were suspended in 2007, will be reinstated for butter, cheese and skimmed milk powder, the EU Agriculture Commissioner Mariann Fischer Boel announced yesterday (15 January).

"It was a decision announced yesterday in order to help the European dairy sector as economic conditions worsen," a spokesperson for the EU told just-food this afternoon.

The EU will also ask member countries to increase the volume of butter and milk powder bought into storage via regular tenders. The dairy products will then be held until prices rise and they can be sold into EU markets.