(1)

World market prices for dairy products have collapsed notably due to a drop in demand in connection with the financial and economic crisis. Community market prices for dairy products have also fallen significantly due to the crisis and changes in supply.

(2)

The fall of dairy product prices in the European Union have strongly affected the farm gate prices. A significant period is needed for a sustainable recovery. Therefore, it is appropriate to grant to the Member States a financial envelope in order to support the dairy farmers that are severely affected by the dairy crisis and encounter liquidity problems in these circumstances.

(3)

The financial envelope to each Member State shall be calculated based on the 2008/2009 milk production within national quotas. Member States should distribute that national amount available on the basis of objective criteria and in a non-discriminatory way, while avoiding any market and competition distortions.

(4)

The implementation of this Regulation should be carried out taking into account the institutional arrangements of each Member State.

(5)

The support to the dairy farmers should be granted as an intervention measure to regulate agricultural markets in accordance with Article 3(1)(b) of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (2).

(6)

For budgetary reasons, the Community will finance the expenditure incurred by Member States in relation to the financial support of dairy farmers only where such payments are made by a certain deadline.

(7)

In order to ensure transparency and the monitoring and proper administration of the national envelopes, the Member States should inform the Commission of the objective criteria used to determine the methods for granting support and the provisions taken to avoid distortion of the market.

(8)

In order to ensure that dairy farmers receive the support as soon as possible, the Member States should be enabled to implement this Regulation as quickly as possible. Therefore, it is necessary for it to enter into force without delay.

(9)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for the Common Organisation of Agricultural Markets,

(a)

without delay and no later than 31 March 2010, a description of the objective criteria used to determine the methods for granting support and the provisions taken to avoid distortion of the market;

(b)

no later than 30 August 2010, the total amounts of aid paid and the number and type of beneficiaries.