EU Extends Storage Subsidy To Bolster Pork Prices
European Union
EU Extends Storage Subsidy To Bolster Pork Prices
Low pork prices in the European Union (EU) have caused the community to introduce aids to private storage. The program provides a subsidy to private companies to store pork meat for a period of between three to six months, in hopes of removing pork from the market and increasing prices. The program was introduced in November 2007 by the EU Commission under intense pressure from producer groups to counter declining pork prices. The scheme was rapidly taken up by private companies, and more than 100,000 metric tons of pork were put into storage between the end of November 2007 and January 2008.
Prices in the EU continued to decline, however, and the Commission responded by reintroducing export refunds on fresh and frozen pig meat on 26 November. Requests for export licenses with refund have been made for almost 171,000 metric tons. Nearly half of the requested tonnage has been for pork cuts, which command a refund of €31.1 ($47.24) per 100kg. Denmark, Germany, the Netherlands and France have taken most advantage of the available refunds, all applying for export licenses for more than 25,000 metric tons. Since the beginning of the 2007/2008 GATT year, requests for export licenses, including processed pig meat products, have been granted for 218,500 metric tons, less than the cumulative available total of 396,000 metric tons. Over the year as a whole, subsidised exports cannot exceed the ceiling of 588,400 metric tons. The export refunds, however, had little or no impact on the exceptionally low internal market price.
Consequently in an effort to avoid further downward pressure on the market resulting from the release of part of the stock created under the aids to private storage scheme (the first contracts come to maturity three months after production) the Commission has decided to extend the period for which this meat may be stored, and for which the storage subsidies will be paid. Participants in the scheme can now apply to extend their subsidized storage of European pork for three months.
European Union
EU Extends Storage Subsidy To Bolster Pork Prices
Low pork prices in the European Union (EU) have caused the community to introduce aids to private storage. The program provides a subsidy to private companies to store pork meat for a period of between three to six months, in hopes of removing pork from the market and increasing prices. The program was introduced in November 2007 by the EU Commission under intense pressure from producer groups to counter declining pork prices. The scheme was rapidly taken up by private companies, and more than 100,000 metric tons of pork were put into storage between the end of November 2007 and January 2008.
Prices in the EU continued to decline, however, and the Commission responded by reintroducing export refunds on fresh and frozen pig meat on 26 November. Requests for export licenses with refund have been made for almost 171,000 metric tons. Nearly half of the requested tonnage has been for pork cuts, which command a refund of €31.1 ($47.24) per 100kg. Denmark, Germany, the Netherlands and France have taken most advantage of the available refunds, all applying for export licenses for more than 25,000 metric tons. Since the beginning of the 2007/2008 GATT year, requests for export licenses, including processed pig meat products, have been granted for 218,500 metric tons, less than the cumulative available total of 396,000 metric tons. Over the year as a whole, subsidised exports cannot exceed the ceiling of 588,400 metric tons. The export refunds, however, had little or no impact on the exceptionally low internal market price.
Consequently in an effort to avoid further downward pressure on the market resulting from the release of part of the stock created under the aids to private storage scheme (the first contracts come to maturity three months after production) the Commission has decided to extend the period for which this meat may be stored, and for which the storage subsidies will be paid. Participants in the scheme can now apply to extend their subsidized storage of European pork for three months.