EU scraps milk quota after 30 years

The European Union (EU) has scrapped the milk quota that was introduced in 1984 to curb surplus milk production in EU nations.

The decision was reached to make dairy businesses compete with international businesses in supplying fast-growing markets in Asia and Africa.

The EU regime comprised of produces paying a levy when exceeding their quota. However, this was applicable only if the national quota was exceeded too. The system of quotas, and the levy threat, helped to cap the expansion of EU production.

The organisation said that over the years, reforms of its Common Agriculture Policy had increased the market-orientation of the sector, and provided help to producers in vulnerable areas, where cost of production would be higher.

The BBC reported that the scrapping of the quota might result in the Irish Republic, the Netherlands and Germany increasing their production sharply. UK farmers have said the move could result in a further slump in the price they get for their milk.

The EU first decided to scrap the milk quota in 2003, so as to make EU producers more flexible to the growing demands, especially of the world market. It was later reconfirmed in 2008 with a range of measures.

EU dairy exports, however, are said to have increased by 45% in volume, and 95% in value in the last five years.

The BBC quoted EU Commissioner for Agriculture and Rural Development Phil Hogan as saying: "It is a challenge because an entire generation of dairy farmers will have to live under completely new circumstances, and volatility will surely accompany them along the road.

"But it certainly is an opportunity in terms of growth and jobs."

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Image: EU said the scrapping of milk quota would make dairy businesses compete with international businesses in supplying fast-growing markets in Asia and Africa. Photo: courtesy of Stuart Miles/freedigitalphotos.net.