German farmers: ‘Aid is not going to help active farms’

Falling milk prices have put the very existence of many farms across Europe in doubt. [USDA/Flickr]

This article is part of our special report The main challenges facing the CAP.

The aid package coming the way of milk farmers will only be of help if funds are not tied to targets on reducing production, the secretary-general of the German Farmers’ Association told euractiv.de. However, he did downplay the impact Brexit will have on the sector.

Bernhard Krüsken is an agronomist and has been secretary-general of the German Farmers’ Association (DBV) since 2013.

Krüsken spoke to euractiv.de’s Nicole Sagener.

On 18 July, the EU’s agricultural council agreed on an aid package to help, among others, crisis-hit milk farmers. Incentives to curb milk production will total some €150 million. Do you welcome this development?

We are not going to be fundamentally critical of the aid package, it’s going in the right direction. But the question is: was this merely a political compromise that will take its time in trickling down to the farmers? It is inevitable that the money will not help active farmers, only those enterprises that have decided to scale back production.

Is it reasonable to tie reducing output to financial aid?

For active operations, the aid is no insignificant amount. It’s now about surviving this crisis, not political quantity control. That is why the aid should focus on those who want to increase production and why it should not be tied to reducing output.

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What should the German government do to ensure that the financial aid gets to the milk farmers directly?

European state aid laws are quite uncompromising in this regard. Aid can only be doled out when the authorities verify that reduction in production has been sufficiently achieved. This could lead to a rapid delay and mean that aid does not get to farmers until 2017. However, operations need to maintain their liquidity. We are therefore working under the assumption that not many outfits will take part. We want an intelligent way of working so the federal government doesn’t delay in making their payments. But it is yet to be negotiated.

Most, if not all, experts cite the fall in demand in China and Russia as the main causes of this situation. Do you agree?

I don’t know who is responsible beyond the fact that it is because of falling demand. The fact that we are earning 3% less on milk currently than two years ago shows that it is not just a question of supply, but demand and the markets. The lack of demand comes from the international market and has led us to these falling prices.

What effect is Brexit going to have on European farmers?

We are not expecting large consequences, even though the UK is a big market for German milk and meat. But until their exit is actually complete, and that may take some time, the British are part of the internal market and I don’t see the market going anywhere any time soon.

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The European Commission also proposed changes to greening at the agricultural council. How do you assess this particular EU initiative?

The Commission started with high hopes and plotted the right course. But now we might even be talking about a deterioration of the situation. Due to the complicated processing and cost-risks involved with greening, many farmers prefer to play it safe and just set land aside, instead of creating conservation areas and the like. You can see that from the numbers that actually engage with greening. It’s going to need more simplification.

The current dilemma is also due to a certain fiscal mechanism. The member states carry out their transactions in situ and they are checked by the Commission. We think that these checks are just unnecessary bureaucracy, which lead to the member states paying more out of their pockets. To satisfy the Commission, the member states have to up their amount of bureaucracy too. There has to be more flexibility.

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