Commission rejects quota reduction pleas in dairy crisis report

By Guy Montague-Jones

- Last updated on GMT

Related tags: Milk quotas, European union, European milk board

The European Commission has rejected any reduction in milk quotas despite protests from dairy farmers struggling to cope with falling prices.

Milk prices have plummeted over the past year to such a level that some farmers are finding it difficult to cover production costs.

Last week exasperated farmers hit the streets of Strasbourg calling for the milk quota to be cut by 5 per cent with the goal of pushing prices back up to a sustainable level.

The EC has already introduced a range of measures to boost prices, including the reinstatement of export subsidies, but it has refused budge on the quota system.

Back in November, an agreement was reached to scrap milk production quotas by April 2015 and to increase milk quotas by 1 per cent a year until then.

No quota change

Today’s EC report said quota system changes would not respect this agreement, and dismissed ideas such as a 5 per cent quota reduction or freeze on quota increases.

“Such measures would have no immediate effect, since they could not be applied before the new quota year on 1 April 2010 due to the legitimate expectations of producers,”​ stated the report.

The European Milk Board (EMB), which represents EU milk producers, has been particularly vocal in its calls for the decision on milk quotas to be repealed and for existing quotas to be cut.

Spokesperson Sonja Korspeter told Dairy Reporter that the the ECB’s initial reaction to the Commission report is that “nothing really new”​ is on the table. Korspeter said there is “a need to reduce volumes”​ and that quotas are the way to achieve this.

Options available

But today the Commission said that while sticking to the decision to scrap quotas: “Member states have a considerable number of instruments available to them to alieviate the situtation.”

One proposal that the ECB welcomed was the option of giving member states the possibility to apply a brake to production by penalising those producers exceeding their individual quota. The Comission said it would reflect on the most effecient way to implement this.

The Commission report contained several other proposals to support income, alongside supply and demand side measures to boost prices.

For example, the Commission will propose an additional round of product promotion programmes on the EU market to help increase demand.

Related topics: Dairy Drinks, Markets

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