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EU to buy 30,000 tons of butter

By Naved Akhtar     Jan 23, 2009 in Business
The European Commission pledged to buy 30,000 tons of butter yesterday from farmers across the 27 country union in its attempt to prevent European farmers going out of business.
The unwanted “butter mountain” will be stored in silos across the continent. The butter will be stored alongside 317,853 tons of unwanted sugar, 16,000 tons of unwanted maize and wheat and millions of gallons of unwanted wine which Brussels have already purchased.
Throughout the EU, the dairy industry employs 400,000 and has a turnover of £112 billion. The main dairy producers in the Europe are the UK, Ireland, Germany, France, the Netherlands, Poland and Italy.
Farmers in Europe have seen a fall in the demand for their products both at home and abroad. This is not the first time the EU has built up a butter mountain. The stocks were at peak in the 1980s which they finally got rid of in 2007.
Despite criticism from dairy producers throughout the world, the EU have not ruled out buying even more butter and milk if necessary. Agriculture Commissioner Mariann Fischer Boel told the BBC: “Further quantities may be accepted with prices to be fixed through fortnightly tenders.”
Longer term, the EU plans to limit market intervention with a view to eventually scrap it.
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