The milk sector is confronted with market disturbance due to a worldwide supply-demand imbalance, in which the prolongation until the end of 2017 of the Russian ban on the import of agricultural products and foodstuffs originating in the Union plays a role.

Global demand for milk and milk products slightly increased in 2015 and in the first months of 2016, but at a much lower rate than production.

Global milk supply generally increased throughout 2015, with a combined production growth in the Union, the United States and New Zealand amounting to some 4,5 million t, while total exports from the Union and those two third countries in milk equivalent decreased by some 200 000 t.

In the first four months of 2016, milk production in the Union, the United States and New Zealand increased by some 3,6 million t, with less than 1 % of that volume being absorbed by additional exports.

Voluntary agreements and decisions on the planning of production in the milk and milk products sector have been authorised for recognised producer organisations, their associations and recognised interbranch organisations by Commission Implementing Regulation (EU) 2016/559 and for cooperatives and other forms of producer organisations in the milk and milk products sector by Commission Delegated Regulation (EU) 2016/558 for a period of six months starting on 13 April 2016. That period was extended by Commission Implementing Regulation (EU) 2016/1615.

Market intervention instruments in the form of public intervention and private storage for butter and skimmed milk powder have remained available without interruption since September 2014.

Those instruments have mitigated the crisis' impact and set a floor to the continuous deterioration of dairy product prices but global imbalance persists.

In order to help the milk and milk products sector find a new balance under the prevailing severe market situation and given that, on the basis of available market analysis, no significant decrease in production volumes is expected until the end of 2017, it is appropriate that aid is made available to milk producers in the Union who voluntarily engage in milk production reduction.

As milk production in the Union is predominantly characterised by cow milk deliveries, while direct sales and milk from other species only represent a marginal share of the Union milk production, it is appropriate that aid is made available for a reduction in cow milk deliveries only.

In order to achieve an effective reduction in cow milk deliveries, the eligibility of applicants should be limited to those who were delivering cow milk to first purchasers in July 2016, the most recent time period for which applicants can provide evidence of such deliveries.

With the same aim of effectiveness, Union aid should not cover more than a 50 % reduction of cow milk deliveries compared to the relevant reference period.

The aid provided for in this Regulation should be granted as a measure supporting agricultural markets in accordance with Article 4(1)(a) of Regulation (EU) No 1306/2013.

It should be allowed to cumulate that aid with other support financed by the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development.

As the financial grant is fixed in euro, it is necessary, in order to ensure a uniform and simultaneous application, to fix a date for the conversion of the amount allocated to Member States not having adopted the euro into their national currencies. It is therefore appropriate to determine the operative event for the exchange rate in accordance with Article 106 of Regulation (EU) No 1306/2013. In view of the principle referred to in paragraph (2)(b) of that Article and the criteria laid down in paragraph (5)(c) of that Article, the operative event should be the date of the entry into force of this Regulation.

In order for the scheme to run effectively without exceeding the maximum total volume of cow milk delivery reduction covered by the aid, notifications should be provided for with regard to applications for aid and applications for payment.

In order to maximise use of the scheme, a number of application periods should be provided for until the total volume of cow milk delivery reduction corresponding to the available budget is exhausted by aid applications. To ensure that applications are efficiently dealt with, they should preferably be submitted by electronic means.

In order for applications to involve a meaningful cow milk delivery reduction and to avoid a disproportionate administrative burden, a minimum quantity of cow milk delivery reduction should be fixed per application.

In order to ensure uniform treatment of applications throughout the Union, a standard conversion factor should be set for converting litres into kg.

Member States should not only check the admissibility of aid applications but also their plausibility. For instance, an aid application for which the total volume of cow milk to be delivered to first purchasers in the reduction period is bigger than the total volume delivered in the reference period should not be considered plausible.

In order to ensure that beneficiaries receive the aid as soon as possible and production reduction can start without delay, this Regulation should enter into force on the day following that of its publication,