Milk firms seek EU ‘road map’ to 2015
Michael Barry, Director of the representative association for milk processors, said their main concern is that the EU keep in place mechanisms to adjust to the cyclical nature of world dairy prices, during the quota reform process. Many of these mechanisms, such as export refunds, production aids, intervention, private storage and consumption aids have all but disappeared.
The IDIA says the 2008 CAP Health Check is the ideal opportunity for the European Commission to present a clear dairy plan, including the ending of quotas.
Health Check reforms published in late 2008 are likely to be implemented in mid-to-late 2009. If quotas are to end in 2015, policy for that quota year must be published in 2013.
In this short time frame, how the quota system is phased out will be crucially important for farmers, , according to the IDIA, which says farmers must be informed at the earliest possible opportunity of changes.
Four main quota phase-out options are envisaged.
Increasing milk quotas annually is preferred by the IDIA, to enable farmers increase production without high additional quota costs. It would reduce quota rental or purchase costs and provide a soft landing for those exiting, according to the IDIA, while reducing EU dairy product supply shocks. A gentle increase in milk supply could ease prices towards unsupported world levels.
Decreasing the super levy would reduce quota values, while contributing to the EU dairy budget. But it would discourage development of more efficient, larger dairy farms, says the IDIA.
Allowing quota transfer or trade between member states would be complicated, expensive and politically difficult, and wouldn’t provide the clarity needed by the industry, says the IDIA.
The Irish milk processors say leaving milk quotas as they are until 2015 would leave EU farmers at a cost disadvantage.
