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Berlin wants to come to dairy farmers' aid with $228 million

Staff writer |
Germany is planning to come to the aid of its struggling milk producers, whose livelihoods are being threatened by falling prices.

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Chancellor Angela Merkel's conservative party is proposing more than 200 million euros ($228 million) in public funds.

"The government is working intensively on measures that could help ease the situation on the market," Agriculture Minister Christian Schmidt told regional media in an interview on Thursday, without specifying further.

Schmidt is calling a "milk summit" for May 30, bringing together all of the sector's players, from farmers to dairies and distributors.

Hundreds of milk farmers are seeing their livelihoods threatened by slumping prices as supply outstrips demand all across Europe.

Led by discount chains, many German distributors have cut the retail price of milk to 0.46 euros ($0.52) per litre, which producers argue is simply not profitable for them.

"It's important that we achieve a fair sharing of the burden all along the value added chain," Schmidt said.

"At the moment, it's only the farmers who are footing the bill. Dairies and distributors are still earning money."

While the minister remained vague about the possible mechanisms that could be used, members of his conservative CDU party were making more concrete proposals.

In the mass circulation daily Bild, CDU parliamentarian Gitta Connemann suggested a possible 80 million euros in subsidies for farmers' accident insurance, plus a further 150 million euros in public guarantees for loans to farmers.

Schmidt ruled out reintroducing production quotas, which had been the norm in Europe for 30 years until they were abolished last year.

Their abolition led some farmers to expand production and a fall in prices.

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