Hamburg, April 28 - Germany's government said on Tuesday it was considering financial aid for dairy farmers suffering from a collapse in milk prices.
"The goal is to strengthen the food supply chain and retain supplies of high quality food at appropriate prices," Agriculture Minister Ilse Aigner said in a statement.
Aigner was speaking after a German government round table meeting between farmers, retailers and other industry groups to discuss the impact of falling prices of agricultural products.
The meeting was called after milk farmers staged a day of protests in early April after a collapse in milk prices to around 24 euro cents a litre against 40 cents in early 2008 and 30 cents needed to cover costs.
Dairy farmers suffering from acute cash flow problems could be given state guarantees for loans as was currently being undertaken in other industries, Aigner said after the meeting.
Aigner was also considering bringing forward payment of EU subsidies to dairy farmers due at the end of 2009 and delaying farm tax payments.
Germany's dairy industry has said that farmers are suffering the pain of EU reforms.
In November 2008, the EU agreed an annual increase in production quotas which raised production and increased volumes of milk freely traded on the market.
Aigner refused German state guarantees for milk prices and said retailers and industry had declined minimum price levels.
German retail association HDE said milk prices were falling as too much was being produced.
"Farmers must seek to produce less milk and this could be achieved by reducing the number of cows with state support," said HDE spokesman Hubertus Pellengahr.
"When consumers face higher prices during periods of tight supply then they must also profit from price reductions in current times," he said.