Dairy farmers fear price slump
Quotas that drained the infamous EU ‘milk lake’ end today amid fears of foreign production swamping French industry
FRENCH dairy farmers fear being swamped with foreign milk products as the European Union today ends long-running quotas on milk production.
Prices will also fall as the move means that dairy farmers can produce as much milk as they are able without being penalised for over-production.
Germany is the major dairy supplier and ending the quotas has been warmly welcomed there.
The European Commission says that there will be a “certain volatility in price” in the short-term but 90% of dairy production is already sold outside the EU and these markets will be targeted. It adds that the demand in China is much greater than the supply and it expects global demand to rise by 30% by 2024.
The quotas were introduced as part of the Common Agricultural Policy in the 1980s to end the “milk lake” and “butter mountain” caused by over-production.
They were used to guarantee a price for producers but in 2003 it was decided to get rid of them, with a “soft landing” after 2008 as they were eased out.
Dairy producers’ group FNPL says it would be ridiculous to assume that producers could “exert virtuous control” of production – “only public authorities can do that”.
Last year France produced 25 million litres of milk from its 72,000 dairy farms, which account for 200,000 jobs.
The move will not, however, give producers carte blanche to ramp up production as environmental regulations are set to be tightened in the EU, with controls on ammonia and methane emissions.
