The 6 billion forints (EUR ) paid out to milk producers within the framework of exceptional adjustment aid (EAA) is part of series of measures that the Government has introduced during the past two years in the interests of handling the milk market crisis.
The introduction of the Russian embargo in 2015 caused major disruption on European agricultural markets, and especially on the milk and milk products market. In response to requests from member states, the European Commission realised several measures, including 500 million euros in emergency milk aid in 2016. Hungary receive 3 billion forints from this fund, which together with national supplementation and the related de minimis funding meant 9.0 billion forints in aid for the sector.
In view of the fact that the crisis measures have not had the desired effect, following the emergency milk aid, in the summer of 2016 the European Commission decided on the introduction of another 350 million euro aid construction, of which Hungary received 9.5 million euros, a proportionally outstanding level. The Government provided a similar amount of 3 billion forints, making use of the opportunity to supplement the aid with 100% national funding. The opportunities inherent in the exceptional adjustment aid include the fact that it is not linked to any production or stock reduction programme, but is aimed at keeping milk production at its current level.
1261 milk producers applied for funding with relation to 160,000 dairy cows, which represents some one third of current cattle stocks. Payment of the aid was realised by the Treasury almost a month ahead of the deadline prescribed by EU law.