EU dairy scheme may see price hike

As the EU moves to pay dairy farmers to produce less, Irish CAP expert Alan Matthews said the measure could raise EU dairy farm incomes in the last quarter of the year by as much as €289m.

He said the measure leverages an EU budget transfer to farmers (in this case €150m) by also requiring consumers and the dairy industry beyond the farm gate to make a contribution, in the form of higher milk prices.

It is thus primarily an income transfer measure, justified on the basis that current milk prices are about 20% below the past five years’ average.