Common organisation of the market in milk and milk products

The common organisation of the market in milk and milk products enables prices to be stabilised and farmers guaranteed a fair standard of living through the implementation of systems of intervention, marketing and trade with Non-EU Member Countries.

ACT

Council Regulation (EC) No 1255/1999 of 17 May 1999 on the common organisation of the market in milk and milk products [See amending acts]

SUMMARY

This Regulation contains a comprehensive legislative framework for the common organisation of the market in milk and milk products. Before the adoption of this Regulation, legislation for these products, starting with the first Regulation of 1968, was fragmented.

This CMO provides for a system of intervention within the framework of the internal market and certain support measures for European products when they are traded on the world markets.

Scope

The CMO for milk covers:

• milk and creams;
• buttermilk, yoghourt and kephir;
• whey;
• butter and other fats;
• cheese and curd;
• lactose and lactose syrups;
• preparations used as animal feed.

Internal market

This is to run annually from 1 July to 30 June.

The intervention prices for 100 kg of butter are:

• EUR 328.20 from 1 July 2000 to 30 June 2004,
• EUR 305.23 from 1 July 2004 to 30 June 2005,
• EUR 282.44 from 1 July 2005 to 30 June 2006,
• EUR 259.52 from 1 July 2006 to 30 June 2007,
• EUR 246.39 as from 1 July 2007.

The intervention price for 100 kg of skimmed milk powder is EUR 169.80.

Intervention and private-storage arrangements

Intervention agencies in each Member State buy in butter at 90% of the intervention price during the period 1 March to 31 August of any year, on the basis of specifications to be determined. The Commission may suspend intervention if the quantities offered exceed 30 000 tonnes in 2008 and subsequent years. The butter bought in must have certain characteristics and meet certain requirements. Private storage aid may be granted for salted or unsalted butter produced from cream or milk. The aid amount is determined in the light of storage costs and the likely trend in prices for fresh butter and butter from stocks. Butter bought in by the intervention agencies is to be disposed of in such a way as to avoid disturbing the balance on the market.

The intervention agencies of the Member States buy in skimmed milk powder at the intervention price between 1 March and 31 August. That milk must comply with certain composition characteristics, particularly as regards minimum protein content, which must be 34% of the non-fat dry matter. The Commission may suspend intervention if the quantities offered exceed 109 000 tonnes.

Private-storage aid is granted for certain cheeses, such as Grana Padano, Parmigiano Reggiano, Provolone, sheep's and goat's milk cheese, as well as long-keeping cheeses. The aid amount is determined in the light of storage costs and the likely trend in prices. Where the market situation so requires, the Commission may decide to remarket the various cheeses stored.

Special marketing aid

Aid is available for:

• producers of skimmed milk and skimmed milk powder (including buttermilk and buttermilk powder) used for animals, provided that these products meet certain conditions;
• skimmed milk processed into casein and caseinates;
• the purchase of cream, butter and concentrated butter by non-profit bodies, by manufacturers of certain food products and for direct consumption.

School milk aid

In order to encourage children to drink milk, aid for the supply of 0.25 l of milk equivalent per pupil and per day is paid to educational establishments. The Community aid is EUR 18.15 for 100 kg of all types of milk. Member States may grant additional aid.

Trade with Non-EU Member Countries

Imports and exports may be subject to issue by the Member States of an import/export licence.

In general, in trade with Non-EU Member Countries, milk and milk products are subject to the rates of duty in the common customs tariff; taxes having equivalent effect to customs duty and the application of quantitative restrictions or measures of equivalent effect are prohibited.

However, additional duty may be charged under the conditions set out in the agriculture agreement (pdf) of the World Trade Organisation (WTO). The Community informs the WTO of the trigger prices below which additional duty may be charged. In addition, under certain circumstances, tariff quotas may be awarded using the first come/first served principle, the simultaneous examination method, the traditional importers/new arrivals method, or other non-discriminatory methods.

In the case of exports, the difference between prices on the world market and Community prices may be covered by export refunds. These are awarded using the method considered the most suitable and creating the lightest administrative burden. The refund amount established takes into account a series of factors, such as the price of the milk and the costs of marketing. In certain cases, such as where the free-at-frontier price significantly exceeds the Community price and threatens to cause long-term disruption to the proper functioning of the Community market, the Community may fully or partially suspend import duties and even collect export levies.

Safeguard measures may be taken if the Community market is threatened with serious disturbance by reason of imports or exports. In addition, under certain circumstances, recourse to inward processing arrangements may be prohibited.

Committee procedures

In implementing the Regulation, the Commission is assisted by a Management Committee for Milk and Milk Products (FR), comprising representatives of the Member States and chaired by a representative of the Commission.

RELATED ACTS

Detailed implementing rules

Commission Regulation (EC) No 2771/1999 of 16 December 1999 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards intervention on the market in butter and cream [Official Journal L 333, 24.12.1999].See consolidated version (pdf )

Commission Regulation (EC) No 2799/1999 of 17 December 1999 laying down detailed rules for applying Regulation (EC) No 1255/1999 as regards the grant of aid for skimmed milk and skimmed-milk powder intended for animal feed and the sale of such skimmed-milk powder [Official Journal L 340, 31.12.1999].See consolidated version (pdf )

Commission Regulation (EC) No 2707/2000 of 11 December 2000 laying down rules for applying Council Regulation (EC) No 1255/1999 as regards Community aid for supplying milk and certain milk products to pupils in educational establishments [Official Journal L 311, 12.12.2000].See consolidated version (pdf )

Commission Regulation (EC) No 214/2001 of 12 January 2001 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards intervention on the market in skimmed-milk powder [Official Journal L 37, 7.2.2001].See consolidated version (pdf )

Commission Regulation (EC) No 2535/2001 of 14 December 2001 laying down detailed rules for applying Council Regulation (EC) No 1255/1999 as regards the import arrangements for milk and milk products and opening tariff quotas [Official Journal L 341, 22.12.2001].See consolidated version (pdf )

Commission Regulation (EC) No 1244/2004 of 6 July 2004 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards the granting of private storage aid for certain cheeses in the 2004/05 storage period [Official Journal L 236, 7.7.2004].

Commission Regulation (EC) No 562/2005 of 5 April 2005 laying down rules for the implementation of Council Regulation (EC) No 1255/1999 as regards communications between the Member States and the Commission in the milk and milk products sector [Official Journal L 95, 14.4.2005].

Commission Regulation (EC) No 1898/2005 of 9 November 2005 laying down detailed rules for implementing Council Regulation (EC) No 1255/1999 as regards measures for the disposal of cream, butter and concentrated butter on the Community market [Official Journal L 308, 25.11.2005].See consolidated version (pdf )

Commission Regulation (EC) No 734/2006 of 16 May 2006 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards the granting of private storage aid for certain cheeses in the 2006/2007 storage period [Official Journal L 129, 17.05.2006].

Commission Regulation (EC) No 1282/2006 of 17 August 2006 laying down special detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards export licences and export refunds for milk and milk products [Official Journal L 234, 29.8.2006].See consolidated version (pdf )

Commission Regulation (EC) No 587/2007 of 30 May 2007 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards the granting of private storage aid for certain cheeses in the 2007/2008 storage period [Official Journal L 139, 31.05.2007].

Milk quotas

Council Regulation (EC) No 1788/2003 of 29 September 2003 establishing a levy in the milk and milk products sector [Official Journal L 270, 21.10.2003]. With effect from 1 April 2004, for eleven consecutive periods of twelve months, the Member States collect a levy from farmers on quantities of cow's milk or other milk products marketed during the relevant twelve-month period in excess of the maximum reference quantities allocated to each Member State.

See also

For more information, please refer to the website of the Directorate General for Agriculture and the relevant European laws. The fact sheet on 'Milk and milk products in the European Union' (pdf) also gives information on this sector.

Last updated: 07.03.2008