EC moves to ease limits on milk

DAIRY farmers will know by the end of the year how the European Commission will manage the demise of milk quotas – and in the wake of comments by Agriculture Commissioner, Mariann Fischer Boel, all the bets are on an easing the brakes on production to offset a forecast decline in cow numbers across Europe.

The Commission has confirmed it will publish firm proposals on the future of the dairy regime in November. These will be the agenda for the dairy part of the CAP health check, and will include formal confirmation that quotas will lapse when the present regime ends in 2015.

Mrs Fischer Boel was forced to confirm that allowing an increase in production would be addressed after Germany raised concerns about increasing retail prices.

The Commission’s goal is a soft landing for farmers when quotas end after 30 years. It is easy now to see this happening when prices are high, but the process will still need to be well managed so that production increases slowly in advance of the move to a free market.

The options remain an annual market linked increase in quota, a reduction in superlevy, or the scrapping of restrictions on transferring quota between member states. The former is the most likely option for the EC.

A number of member countries have already pressed the EC to agree to a quota increase, ideally before the start of the next quota year in April, allowing Europe to gain from southern hemisphere production problems at a time when global dairy markets are at record levels.