EU backs milk production cuts to tackle low prices

The European Union voiced support on Monday for temporary cuts in milk production by farmers in member states in a bid to reverse the plunge in prices that has shaken the dairy industry.

The European Commission, the executive of the 28-nation bloc, said it would soon send member states the proposal which is required as an emergency exception to rules guaranteeing economic competition.

Overproduction of milk since EU quotas were abolished in April 2015 triggered a collapse in prices.

"I am prepared to propose the application of such rules whereby the Commission... would decide to permit on a temporary basis such voluntary agreements for the dairy sector," EU agriculture commissioner Phil Hogan told a crisis meeting of agriculture ministers in Brussels.

"The full modalities of this measure have yet to be finalised by the Commission and I expect that we will be in a position to communicate these to MS (member states) very shortly," Hogan said.

A combination of factors, including changing dietary habits, slowing Chinese demand and a Russian embargo on Western products in response to sanctions over the Ukraine conflict, has pushed down prices for beef, pork and milk.

Around 100 farmers protested outside as agriculture ministers met just six months after Brussels announced a 500-million-euro ($556 million) emergency package to tackle the crisis.

The European Copa-Cogeca farmers union said immediately after the September crisis ministerial meeting -- where thousands of farmers protested -- the EU aid was nowhere near enough to compensate farmers for the loss of their main export market Russia.