Brussels, May 25 - France, backed by Austria and Germany, will push Europe's farm chief on Monday to agree to measures to help the European Union's dairy sector cope with low market prices and poor export volumes.
Dairy farmers have protested in several EU countries about low milk prices, putting pressure on their governments to help.
About 800 farmers demonstrated outside the executive European Commission in Brussels on Monday, police said. The protesters, who had a live cow with them, shouted: "Fair prices for milk."
The Commission has already taken some steps to prop up dairy markets, including the reinstatement of export subsidies and private storage.
It has raised ceilings on volumes of butter and skimmed milk powder that can be bought into public intervention stores, to remove supply from the market.
France and Germany say their producers are badly hit and want more action to support prices and shore up farmer incomes.
DEADLINE EXTENSION SOUGHT
The countries want an end-August deadline for EU public intervention buying of butter and skimmed milk powder (SMP) to be extended if needed, subsidies for SMP for use in animal feed, and subsidies in the EU's free school milk scheme to be raised. "Despite the reintroduction of export subsidies at the end of January, the European Union is still not very competitive on the butter and butteroil markets, and especially that for cheeses," said a French note to be read out to EU farm ministers at a meeting on Monday in Brussels.
"Market prospects for the second half of 2009 remain uncertain and the situation very worrying."
The note said cheese exports were down by 10 percent during the first three months of 2009 and those of butter fell by three percent. It called for EU cheese export subsidies to be increased.
"Destocking of intervention products should only take place in a context where markets can absorb these volumes driving market prices lower. If necessary, public intervention measures should be extended beyond August 31," the paper said.
In addition, it called for Commission experts to produce a report on the EU dairy market as soon as possible, before the agreed 2010 publication date, together with annual reports before milk production quotas are finally scrapped in 2015.
Over the last few months, at least five countries have demanded urgent action and delays to annual rises in EU milk quotas, agreed in November under the "health check" -- or mini-reform -- of EU farm policy, to allow prices to recover.
However, the idea of suspending the one-percent quota increases has been dismissed by EU Agriculture Commissioner Mariann Fischer Boel, who says she is not prepared to reopen the so-called health check negotiations.
Fischer Boel has said EU milk production should come in at between 4 and 5 percent below the maximum quota quantities this marketing year, with the same undershoot in 2009/10.
"This clearly shows that farmers understand that it is market prices and their cost structure rather than the quota levels that should determine their production decisions," she told EU farm ministers at their meeting in March.