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 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 are used when a crisis or the threat of a crisis has arisen and a specific response is needed to prevent a sudden drop in prices and/or mitigate its consequences. They allow the European Commission to quickly take proportionate action if there is:
- a period of severe imbalance in markets;
- a loss of consumer confidence due to public, animal or plant health risks;
- a specific problem.
The legal basis for the use of exceptional measures in agricultural markets is EU Regulation 1308/2013.
Sector-specific aid schemes
Sector-specific aid schemes address specific issues in certain EU agricultural markets. They aim to improve the capacity of EU agricultural sectors to adapt to market conditions and increase their competitiveness and sustainability. The fruit and vegetable sector in particular relies on producer organisations. Other sectors include specific crisis prevention and risk management measures that can fulfil the role of market intervention. Currently, these schemes cover:
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.
The following legislation governs the application of market measures to support the agricultural sector:
- Articles 11-16 of EU Regulation 1308/2013, on the use of public intervention in agricultural markets;
- Articles 17-21 of EU Regulation 1308/2013, on the provision of aid for private storage of agricultural products in agricultural markets;
- Articles 219-222 of EU Regulation 1308/2013, on the use of exceptional measures in agricultural markets.
- Articles 22-60 of EU Regulation 1308/2013, on the provision of sector-specific aid schemes in agricultural markets.