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UPDATE 1-EU to offer extra 300 mln euro aid to dairy farmers

Published 10/16/2009, 12:39 PM
Updated 10/16/2009, 12:42 PM

* Farm ministers to discuss further measures

* Group of 21 wants to "define" framework for milk market

(Adds details, background)

BRUSSELS, Oct 16 (Reuters) - The European Union will next week unveil additional aid of 300 million euros ($448 million) to dairy farmers hit by low milk prices, EU diplomats said on Friday.

The proposed aid will come from the European Union budget for next year and has won support from 21 of the 27 EU member states including France and Germany, the diplomats said.

EU agriculture ministers meeting on Monday in Luxembourg will announce the measures and discuss proposals from the bloc's executive European Commission and other member states aimed at helping the farmers.

Thousands of dairy farmers staged protests and embarked on a two-week milk supply boycott across Europe in September, blaming the Commission's liberalisation policies for falling milk prices.

The farmers have demanded that milk surpluses be removed from the market in the short term and have asked the ministers to implement a voluntary suspension of partial EU milk quotas so as to limit milk production.

"There will be several thousand dairy farmers and several hundred tractors making their way to Luxembourg next Monday, to lend emphasis to their demands," Fredy de Martines of the LDB, the Luxembourg branch of the European Milk Board, said in a statement.

The group of 21 EU states said in a draft paper that they would like to see the ministers define a regulatory framework for the European milk market that would contribute to stabilising the market and producers' income.

"We wish to see the adoption of a series of immediate measures in order to effectively stabilise the dairy sector rapidly," the draft paper, seen by Reuters, said.

Other measures to be discussed by the ministers include a prolongation of public intervention in the dairy market, increasing public- and private-sector storage as well as tighter management of quota overruns. (Reporting by Bate Felix and Julien Troyer)

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