New rules increasing the public intervention ceiling for Skimmed Milk Powder (SMP) from 218,000t to 350,000t formally enter into force today, June 30.

This move follows a strong take-up of SMP intervention in response to the current market crisis, and follows on from the exceptional measures announced by the European Commission at the March Agriculture Council.

The increase in the intervention ceiling comes at a moment when the volumes of SMP bought up so far this year have already reached 296,525t, of which 218,000t via fixed-price intervention and 78,525t via intervention tenders, the Commission has said.

It has announced that the latter figure includes bids for 15,127t of SMP from 12 Member States which were accepted by the Commission last week under the tender system at a maximum price of €169.8/100 kg (the intervention price) - as backed by last Thursday's CMO Committee.

With the increased ceiling now in place, intervention buying-in of SMP has now reverted to the fixed price system.

In his statement on the market situation to Monday's Council of Agriculture Ministers in Luxembourg, Commissioner Phil Hogan confirmed that the Commission is working on a support package for the dairy sector, with financial resources if necessary, which he expects to be in a position to present to the Council in July.

In devising such a support package, we are looking at all options available to us that will help to bring balance to the dairy market.

"Given that there are limitations on what can be done to encourage demand, we must inevitably focus on the supply side of the equation. While our analysis is still ongoing, we have to look at all of the instruments available to us and consider whether or not or on what terms access to those instruments continues to be available.

"I am, of course, conscious that the crisis in the European dairy sector is one being experienced in every Member State, even if more acutely felt in some than in others.

"Therefore, any new package will, in addition to addressing stabilisation and reduction of production, also have to be equitable in its treatment of dairy farmers throughout the Union," he concluded.