Overview
Market measures aim to stabilise agricultural markets, prevent market crises from escalating, boost demand and help EU agricultural sectors to better adapt to market changes. They are part of the common market organisation regulation, which lays out the framework under which EU agriculture works within the single market. Market intervention measures are funded through the European agricultural guarantee fund.
Public intervention
Public intervention is where products are purchased and stored by EU countries governments or their agencies and then sold back on the market at a later date. It aims to prevent prices from dropping to unsustainably low levels.
Public intervention is currently available in a number of sectors that are prone to fluctuations in price. To combat this instability, the EU has adopted a mechanism to mitigate the impact on farmers of years with particularly low price levels. The sectors which can benefit from public intervention are:
There are strict standards on the quality of the goods that can be stored.
Public intervention can work through a fixed price mechanism or through tenders. The fixed price mechanism means that the EU sets a fixed price at which a certain quantity of any one type of product will be bought. This acts as a price floor that helps to prevent the market price falling below a sustainable level. The tender mechanism means that operators offer a certain price and quantities below a price decided by the EU after bids were made, are bought at the price offered by operators. These quantities are then sold through a tender mechanism at a later date when market conditions have improved.
Storage of products by the private sector
During times of lower market prices, the EU can also provide support to private sector operators in paying for the cost of storage of their products for a determined period of time. This temporarily reduces the impact of short-term oversupply. Currently aid can be granted for private sector storage in the following sectors:
Exceptional measures
Exceptional measures are used when a crisis or the threat of a crisis arises, and a specific response is needed to prevent market disturbances and/or mitigate their consequences. They allow the Commission to take rapid and proportionate action and adopt measures that:
- React to market disturbances.
- Address the market impact of sanitary measures adopted to avoid the spread of animal diseases or plant pests, and/or a loss of consumer confidence due to public, animal or plant health risks.
- Resolve specific problems requiring targeted intervention to avoid the deterioration of market conditions.
- Allow for the agreements and decisions of farmers, their associations, recognised producer organisations and recognised interbranch organisations when markets suffer severe imbalances.
In recent years, such measures have been used to address a wide range of events affecting EU agriculture, including the effects of the COVID-19 pandemic, the war in Ukraine, animal disease outbreaks, major market disturbances and extreme weather events.
As part of the current legal provisions, the Commission must report every three years to the European Parliament and to the Council on the use of crisis measures adopted on the basis of Art. 219 to 222 of the CMO Regulation.
According to the first report published in January 2024, over the period 2014-2023, 63 exceptional measures were adopted to support farmers and producers facing loss of production, falling prices, higher costs or supply chain disruptions.
By channelling more than €2.5 billion of EU funds to the EU agricultural sector, these measures have shown the Union’s solidarity with its agricultural sector in times of crisis. At the same time, their use should complement and not substitute farmers’ own risk-management efforts and help stabilise markets.
Funding
Within the current CAP in place since 2023, an agricultural reserve with a yearly allocation of at least €450 million was established to finance market measures and exceptional measures.
Under the 2028-2034 Multiannual Financial Framework proposal , a new Unity Safety Net has been put forward to help EU farmers in case of disturbances in the agricultural markets, for an overall amount of €6.3 billion.
Legal basis
The legal basis for the use of exceptional measures in agricultural markets is Regulation (EU) 1308/2013.
Market transparency and monitoring
Market transparency and monitoring aims:
- to provide accessible information to all participants in the food supply chain, especially those with limited resources such as farmers and researchers. This empowers them to make informed business decisions, thereby ensuring that agricultural markets function correctly.
- to monitor the development of agricultural markets and timely identify possible threats of disturbance, allowing the Commission to take appropriate EU market measures without delay whenever they are needed.
In order to ensure that agricultural markets are functioning correctly and to monitor their development, the Commission gathers information from EU countries and stakeholders. This information, which compliments EU market measures, aims to provide more market transparency, and is compiled and made available through market observatories and the agri-food data portal.
Legal basis
The following legislation governs the application of market measures to support the agricultural sector:
- Articles 11-16 of Regulation (EU) 1308/2013, on the use of public intervention in agricultural markets;
- Articles 17-21 of Regulation (EU) 1308/2013, on the provision of aid for private storage of agricultural products in agricultural markets;
- Articles 219-222 of Regulation (EU) 1308/2013, on the use of exceptional measures in agricultural markets;
- Articles 222a-223 of Regulation (EU) 1308/2013, on market transparency and market monitoring.
