Poland has been seeking to increase the level of EU intervention prices for a long time. Unfortunately, the applications submitted by our country on this matter have so far not gained support either from other Member States or from the European Commission itself. So it seems that it will stay as it is, because apart from Poland, no one wants to increase EU intervention prices.
Once again, the agricultural local government submitted a request to the Ministry of Agriculture to increase the level of EU intervention prices for the purchase of agricultural produce.
And once again he did nothing in this case.
No one in the EU – apart from Poland – cares about making intervention prices more realistic
In the opinion of the Ministry of Agriculture and Rural Development, making intervention prices more realistic (increase) applies to all agricultural sectors for which intervention purchase is provided for under the EU Common Agricultural Policy, i.e. common wheat and durum, barley and corn, beef and veal, and butter and skimmed milk powder (SMP).
The Ministry of Agriculture, in the person of Deputy Minister Michał Kołodziejczak, agrees that it would be useful to change the rates.
– It should be noted that when the intervention purchase prices of butter and SMP were last adjusted in the EU (EC Council Regulation No. 1255/1999 of 17 May 1999 on the common organization of the market in milk and milk products), this change consisted in their gradual lowering. This was a process resulting from the decision to adjust EU prices to the level of world prices. Today, approximately twenty-five years after those decisions, costly and far-reaching pro-environmental changes are taking place in EU agriculture and agricultural processing, and the geopolitical situation is additionally intensifying the increase in production costs – he notes in a response to KRIR.
And he admits that Poland, during the recent reforms of the EU’s Common Agricultural Policy, applied for increased opportunities to stabilize agricultural markets, including: by creating an observatory of agricultural product markets, an early warning mechanism against crisis situations, and extending the scope of sectors covered by market intervention, including making public intervention available throughout the year. As Deputy Minister Kołodziejczak notes, some of these demands have been implemented. The outbreak of the COVID-19 pandemic, as well as Russia’s aggression in Ukraine, not only contributed to increased uncertainty on the market, but also triggered inflationary processes, affecting, among others, to the increase in agricultural production costs. This intensified Poland’s efforts at EU forums to adjust intervention price levels to market realities.
– In 2023, the Ministry of Agriculture and Rural Development several times asked both the EU Council and directly the EU Commissioner for Agriculture and Rural Development to plan a legislative process aimed at updating intervention prices. It was emphasized that in the case of the milk market, the situation on the global market first led to reductions in the sales prices of dairy products and, consequently, in the first half of 2023, forced significant reductions in purchasing milk prices. Nevertheless, despite the intervention purchase opened on February 1, 2023, market prices of butter and SMP, although significantly lower than in 2022, were still at a level higher than their intervention prices, which prevented any rational sale of these products into public stocks. in the EU. Taking into account that changing the level of intervention prices requires a time-consuming decision-making procedure, it was requested to launch it as soon as possible so that the EU agri-food processing sector is not left without such an important protective mechanism as public intervention – emphasizes Kołodziejczak in his response.
But he also admits:
– Poland’s requests to increase intervention prices were not supported by other Member States or the European Commission.
Maybe Copa-Cogeca can help?
As explained by the Ministry of Agriculture and Rural Development, opponents of the solution suggested by Poland pointed out that public intervention is only one of several available mechanisms to counteract crisis situations on agricultural markets.
– It was emphasized that public intervention must remain a safety net mechanism, guaranteeing public purchase of agricultural products only in exceptional circumstances, i.e. in situations of the greatest drops in their prices. Therefore, intervention prices should not be set at higher levels than currently, so as not to trigger production for “intervention”, which not only distorts the market, but also involves the EU budget first in the purchase and then in the management of the thus accumulated intervention stocks. In his response to the Ministry of Agriculture and Rural Development, the EU Commissioner for Agriculture and Rural Development also emphasized that the possible budgetary consequences of an increase in intervention prices would have to be financed from the agricultural reserve, recalling at the same time that the economic performance of agricultural holdings is primarily supported by the granting of direct payments and support for investments – emphasizes Deputy Minister Kołodziejczak in response to KRIR.
And adds:
– To sum up, it seems that despite Poland’s position on the need to increase intervention prices clearly and precisely expressed on the EU forum, it currently does not find sufficient support from other member states to implement it.
In this context, Deputy Minister Kołodziejczak asked KRIR to inform whether during the COPA/COGECA meetings the issue of increasing intervention prices was raised by the Polish and other delegations, and what were the opinions on this proposal expressed by representatives of producers and processors from individual EU Member States.
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