Anticipation and angst over milk quotas

(File)
(File)
Shutterstock [http://www.shutterstock.com]

Paris - European dairy farmers are facing the end of three decades of milk quotas on Wednesday with a mixture of anticipation and angst as it will allow them to serve growing demand in emerging markets, but could also cause a crash in prices.

Farmers will be allowed churn out as much milk as they want from 1 April.

While the quotas had been increased in recent years - growing 1% a year between 2009 and 2013 --- the complete liberalisation of the market is seen as a game changer for producers.

In northern Europe, farmers have hailed the move as a chance to cash in on the growing global thirst for milk, particularly in China.

Ireland has already announced plans to boost its milk output by 50% by 2020. The Netherlands and Germany, Europe's largest producer, are gearing up for increases of 20%.

Butter mountains

"We're happy the quotas are being scrapped. We're prepared," said Karl-Heinz Engel, president of the German dairy industry association, MIV, insisting that the sector was "export-orientated and competitive".

But many farmers in France, Europe's second-biggest milk producer, have adopted a wait-and-see approach, preferring to wait for the demand to pick up before ploughing money into boosting their output.

The quotas were introduced in the mid-1980s to staunch the infamous milk lakes and butter mountains that had built up on the back of generous EU production subsidies.


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