Back to quotas? - Milk supply limits

THE ending of milk quotas early last year was supposed to herald an age of prosperity in rural Ireland. 

Artificial constraints that had controlled dairy production for decades were consigned to history. The sky was the limit; farmers could, in theory at least, sell as much milk as they might produce.

That land of milk and honey remains elusive because over-production and falling demand in China, as well as vetoes on sales to Russia, have combined to cut farmgate milk prices below the level of production costs. Two years ago, farmers could expect around 38c a litre but that has collapsed to around 24c-26c a litre.

Yesterday European authorities agreed to introduce voluntary milk supply limits — milk quotas by another name — to try to slow that collapse. France sought this intervention though Ireland opposed it. Farm incomes are a unique combination of earnings limited by powerful retail forces, market whims, and EU subsidies, but despite that milk producers are in an unenviable position right now.