Support to farmers due to excessive increase in feed prices, as well as shipping costs decided by the Council of Ministers, following a proposal by Minister of Agriculture Costas Kadis. State aid will be given to all sectors of the primary sector in an effort not to drastically change the price of other essential products such as milk, dairy products and meat. The Government, seeing the financial impasse in which the breeders have found themselves, decided to pay financial aid exclusively for the effects of the increases in cereals in the amount of € 8,865,000.
The decision to support the livestock sector also has to do with the consequences that remain due to the restrictions imposed by the coronavirus, which seem to have an impact internationally on both the supply of raw materials and the transit trade. Rises in grain prices in some cases approach 50%, followed by increases in the international market. Furthermore, it seems that the cost of feed in Cyprus increases even more with an additional cost of € 17 per ton of grain than the cost of transport by ship, due to the large increase in demand, but also the lack of ships.
As it has been observed so far, the sharp increases in production costs due to cereals are not passed on to the supply chain and therefore farmers are left with a loss. For milk, the price remains stagnant since the halloumi exports have been reduced with the closure of the catering sector in traditional markets of the product. As for the price of meat, it in turn remains at the same level for two main reasons. The first has to do with the limited domestic demand due to the decrease observed in the descent of tourists. The second concerns competition from imports, mainly of pork, with producer prices remaining low on the European market.
The total amount of aid of € 8,865,000 has been calculated separately for each livestock sector based on the impact. Therefore, sheep and goat farming will receive support of € 3,170,000, pig farming € 2,720,000, cow farming € 1,670,000, poultry farming € 1,280,000 and rabbit farming € 25,000.
With regard to sheep and goat farming, the amount will be distributed as an additional head aid of a maximum of € 8 per eligible female animal. All units can participate in the project, whether or not they deliver an annual quantity of milk greater than 10 tonnes to approved dairies
For the pig and poultry sectors there is a ceiling as a maximum amount of aid per beneficiary the amount of € 125,000. For all sectors except sheep and goat farming, a state aid plan will be prepared on the basis of the temporary state aid framework and in cooperation with the Office of the State Aid Supervisor, which will be forwarded to the Commission for approval. The eligibility criteria, as well as the determination of the per capita amount of support per sector and per case, will be included in this plan.
The payment of the aid will be made by the Cyprus Agricultural Payments Organization (KOAP) and is expected to be completed within the first half of 2022.