Last November, it was agreed to lift quotas 1% per year, before scrapping them in 2014-2015.
Ministers said the dairy sector is fighting for survival because of plunging prices, but Commissioner Boel said EU milk production is heading for 4% to 5% under quota this year and next year. “This clearly shows that farmers understand that it is market prices and their cost structure, rather than the quota levels, that should determine their production decisions. Quotas are not an obligation to produce, but a possibility.”
She said she was ready to help the market by extending the school milk scheme, but subsidies for skimmed milk powder in feed and casein would not be efficient in current circumstances.
German minister IIse Aigner said that even Germany’s largest producers cannot live with 20 cents a litre, with anything under 40 cents meaning a financial loss.
In Ireland, farmer frustration over low milk prices was aimed this week at Dairygold Co-op, strongly criticised by IFA dairy committee chairman Richard Kennedy for cutting their March milk price in advance to 20c plus VAT. IFA says Teagasc dairy profit monitor results show that even the most efficient farmers need 26 to 29c in 2009, to cover costs and pay for their own labour.
“At 20c/l, the majority of Dairygold suppliers will not cover costs, nor earn any income from which to finance day-to-day living expenses, loan repayments or investment,” according to IFA.
Mr Kennedy welcomed last week’s buying-in of 71% of butter offered into the first EU intervention tender, and export refunds for 73% of the skim milk powder and 44% of the butter offered. He said co-ops must hold their nerve, and ensure suppliers receive viable milk prices. “They must hunt down all collection, processing, administration and marketing costs ruthlessly, and extract all the savings that can be made.”