French way to lift milk price is to cut milk quotas

GOVERNMENTS across the European Union want to boost milk prices, but their solution might not be ideal for the Irish farmers who are clamouring for support.

French farm minister, Hervé Gaymard, has set the pace with his warning last week that slimming fads, like the Cretan diet (see article on this page), are killing the dairy industry. Gaymard says trimming milk quotas is the only solution. The French calculate that a 1% cut in milk quotas would save €350m from the EU’s spending on intervention. “At the same time, it would firm up returns for producers, and, therefore, be beneficial to the whole sector in Europe,” says Gaymard.

At last week’s Farm Council, ministers from Germany, Austria, the Netherlands and Luxembourg said they would be ready to consider Gaymard’s proposal. French dairy farmers, particularly in Brittany, are over-producing and prices have tumbled as a result, by up to 7% in one month. “Since the establishment of milk quotas in 1984, we have only ever seen them rise. It seems to me, today, given the trend towards falling consumption and difficulties with exports, that we have to consider a reduction,” says Gaymard.