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The end of milk quotas: EU must use all tools to avoid market disruptions and become a global dairy leader

31-03-2015

The EU and its member states must use all available tools to avoid disruptions on the milk market, seize the opportunity to build a more confident dairy sector and take the global lead, said chair of the Agriculture committee Czesław Adam Siekierski (EPP, PL) and Parliament's rapporteur on prospects for the EU dairy sector James Nicholson (ECR, UK) on the occasion of the end of milk quotas.

Czesław Adam Siekierski (EPP, PL), chair of the Parliament's Agriculture committee said:

"The elimination of milk quotas raises concerns but also expectations. We know that milk quotas did not save the market from significant fluctuations in prices and incomes, from disruptions or even from the 2008/2009 crisis. And we were all aware since 2003 that milk quotas will end in 2015. Now we should make the most of the liberalisation of the dairy market but at the same time we must remain vigilant and ready to step in if there are any disruptions."

"In the post milk quotas era, it is essential to further strengthen the position of dairy farmers in the milk supply chain so as to achieve stable and just cooperation and exchange between farmers, processors and retailers. We must also focus more on new export markets - and use the new EU promotion policy to this end - but also to diversify, as the Russian embargo has taught us."

"There are many other challenges but there are also quite a few tools made available to the Commission, member states or directly to farmers to address them. These include e.g. new financial and insurance instruments, which are available under the new CAP, but should be introduced more widely. Member states should also make better use of the CAP's rural development funding to help more small farmers producing milk in challenging conditions e.g. in mountainous areas."

"Now, with quotas gone, we must make sure that the European Milk Market Observatory will provide an up-to-date information necessary to monitor the situation on the dairy market and the Commission must be ready to take swift actions if need be. The Agriculture committee will be watching closely the development on the market and stands ready to help if the situation on the market requires further actions."

James Nicholson (ECR, UK), Parliament's rapporteur on prospects for the EU dairy sector – review of the implementation of the dairy package, said:

"Today marks the end of an era for the dairy industry. The end of milk quotas after 31 years will understandably be cause for some nervousness and trepidation for dairy farmers who have always had production governed by quotas. But I believe we must seize this opportunity to build a more confident and robust dairy sector for the future."

"The measures I have put forward in my dairy report, from strengthening contractual relations to improving the operation of the Milk Market Observatory, do not reinvent the wheel. They do however aim to help the sector manage the greatest challenge facing the industry – namely, price volatility."

"We should not be in a situation where we wait with baited breadth on the outcome of commodity auctions in the US and New Zealand. The EU needs to become a global leader and not a global follower. We can make a start by using the tools that we have, but using them better."

Background

The milk quotas were first introduced in 1984, originally for five years, to do away with milk overproduction in the EU. The decision to abolish the dairy quota regime on 31 March 2015 was made in the 2003 Mid-Term Review of the CAP.

In 2012 the Parliament approved so-called Milk Package with the aim to strengthen position of dairy farmers in the milk supply chain e.g. by improving their bargaining power. Further improvements were made in 2013 during the CAP reform.

The Parliament is right now reviewing the implementation of the milk package. The Agriculture committee will adopt in May an own-initiative report to this end with its recommendations.

Tuesday, 31 March 2015

End of milk quotas: Concerns of the dairy sector (EuroparlTV interview with James Nicholson)Press Release - Parliament secures more bargaining power for dairy farmers (15.02.2012)EU farm policy reform as approved by Parliament (Background note)