Quota restrictions blamed for EU’s lost milk sales
They said prospects for the EU milk sector are generally positive until 2008, in terms of market balance, farm-gate prices and income, and meeting possible future WTO commitments.
But losses arise at home and abroad, according to the experts in France’s INRA agri-research body and the University of Wageningen in the Netherlands.
The Commission sees their report as a starting-point for a comprehensive mid-term review of the EU dairy sector.
According to the report, the EU milk economy is suffering a serious loss, because quota restrictions substantially reduce exports of high value products to emerging world markets.
There are losses of sales on the home market too, according to the quota experts.
They arise because of the increasing shortfall in milk supplies on the EU’s internal market, due to fixed milk quotas.
If there was increased supply, prices would be lower and the EU’s domestic consumption of dairy products would increase faster, the Commission was told.
“Decreased export of bulk commodities may not be too detrimental to the EC dairy market,” said the experts who compiled the report. But they added: “Throwing away an EU export capability in high value dairy products is an outcome which may be avoided under a more competitive milk regime in the future.”
They analysed the pros and cons of different dairy regime options in terms of market developments and milk sector revenue.
The options looked at extending the current Agenda 2000 rules; a two-tier quota system; or completely lifting milk quotas.
