Auditors say milk quotas too high
The independent guardian of the financial interests of the citizens of the European Union said EU dairy policy aims for market equilibrium, stable prices, a fair standard of living for farmers, and improving the competitiveness of European milk products.
However, the price paid to farmers fell continuously since 1984 in real terms, and the European Union-15 lost half its dairy farms between 1995 and 2007, with more than 500,000 giving up.
Now, more than one million farmers supply 148 million tonnes of milk annually, and milk processing employs about 400,000.
The European Union share of world trade in milk products has been declining since quotas were introduced in 1984.
The Court recommends that monitoring the development of the milk and milk product market should continue, so that liberalisation of the sector does not lead once again to over-production. Failing this the Commission’s objective of keeping to a minimum level of regulation, of the safety net type, might rapidly prove impossible to fulfil.
The Court recommended that price formation in the food industry be subject to regular monitoring by the European Commission.
“The concentration of processing and retailing companies must not reduce milk producers to price takers, and must not restrict opportunities for final consumers to benefit fairly from decreases in prices,” said the Court of Auditors in a press statement, It recommended that the Commission and member states focus primarily on satisfying the needs of the European domestic market, and on production of cheeses and other products of high added value which can be exported without any budgetary assistance.
