The international market situation for milk products entered a period of decline in the third quarter of 2001 and this decline has deepened since then. Demand is weak for all products in all markets, primarily due to the economic slowdown in key international economies. In an effort to stimulate renewed demand I have pressed the EU Commission continuously for decisive action, utilising all the market mechanisms available at EU level for this purpose. In the past month I have exerted particularly strong pressure on the Commission and I have put a range of proposals to Commissioner Fischler, including the need to adopt a more aggressive export refunds policy, to prolong intervention for skim milk powder and to encourage greater utilisation of internal supports.
I am pleased that the Commission has responded to my proposals by increasing export refunds for cheese by 15%, further increasing skim milk powder and whole milk powder export refunds by 10% and 5% respectively, increasing aid for the manufacture of casein by 52% and agreeing to continue intervention for skim milk powder in excess of the threshold of 109,000 tonnes by means of a tendering system. In relation to this tendering mechanism, I have asked the Commission to ensure it is used to ensure maximum stability for the skim market on an ongoing basis.
These initiatives, taken in the last few weeks, follow a number of actions taken at EU level since the current market deterioration became evident last November. Export refunds for skim milk powder and whole milk powder were increased on five separate occasions and following the latest increase they stand at €715 and €1,078 per tonne respectively. Export refunds for butter were increased twice to their current level of €1,750 per tonne and private storage aid was introduced for butter and cheese. In addition, the main internal support measures such as aids for the use of butter in the ice cream and pastry sectors and aid for the use of skim milk powder in animal feed continue to take up significant quantities. I am fully aware of the situation and I will continue to closely monitor the market for dairy products to ensure every possible action is taken at community level to stimulate demand and to protect the incomes of dairy farmers.