The European Commission has proposed a new EUR500m (US$551m) package of support for European farmers “in the face of ongoing market difficulties, particularly on the dairy market”.

The measures have been outlined to the Council of European Union agriculture ministers by the EU commissioner for agriculture and rural development Phil Hogan.

Hogan said: “Coming at a time of significant budgetary pressures, this package provides a further robust response, and means that the Commission has now mobilised more than EUR1bn in new money to support hard-pressed farmers. Our ultimate goal is to see the much needed recovery of prices paid to farmers, so that they may make a living from their work and continue to provide safe, high quality food for citizens, as well as their contribution to rural areas and rural jobs and the provision of public goods.”

The proposed new aid package features what the Commission said would be an “EU-wide scheme to incentivise a reduction in milk production” (EUR150m).

There is also “conditional adjustment aid” to be defined and implemented by EU member states “out of a menu proposed by the Commission”. Hogan said this meant a total of EUR350m that member states “will be allowed to match with national funds, thus potentially doubling the level of support being provided to farmers”.

In addition, Hogan said the proposed package included “a range of technical measures to provide flexibility”, such as “reinforcing the safety net instruments by prolonging intervention and private storage aid for skimmed milk powder.

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The Commission said the precise details of the proposals will be finalised in the coming weeks in consultation with EU member states. 

Payment “top-ups” under the conditional adjustment aid would not be considered as state aid, the Commission said. “With the prolonged crisis showing that some farmers maintain or even increase production in order to maintain cash flow, the Commission intends to provide new funds which can be linked to specific commitments while contributing to secure market stability.”

The Commission is also proposing that member states be allowed to repeat measures from last year, under which they could advance up to 70% of direct payments to farmers and 85% of area-based rural development payments “without the necessity of completing the on-the-spot checks”.

The new proposals are in addition to a separate EUR500m package of support that was presented by the Commission last September and a range of other measures such as permitting voluntary agreements among milk producers on planning milk production, which was announced in March.

Earlier this month, the European Dairy Association accused the Commission of failing to defend “the core principles” of the EU, after giving France the green light for a two-year trial of mandatory country-of-origin labelling for meat and dairy ingredients used in processed food sold in the country.