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EU Commission Plans for End of Dairy Quotas

Oct 09, 2013

The European Commission held a conference in Brussels on September 24, titled “The EU dairy sector: developing beyond 2015,” to plan for the lifting of the European Union’s milk quota system. At the conference, 400 industry, government, non-government and academic stakeholders discussed the transition to the end of dairy quotas in the spring of 2015 and considered input from industry experts on a wide range of topics, including supply management.

The European Commissioner for Agriculture and Rural Development, Dacian Ciolos, announced that they will strengthen monitoring of dairy markets and collaborate with member states to analyze market trends while moving to a market system without quotas, which have been in place for 30 years. The EU recently approved changes to its Common Agricultural Policy (CAP), a policy document similar to the U.S. Farm Bill, to improve the market orientation  of EU agriculture in light of increased competition in world markets. These changes do not include any new form of supply management.

The movement toward market-oriented policies in the EU dairy sector is supported by new research indicating that international trade underpins EU economic growth in dairy products.  This report, “Economic Analysis of EU Dairy Sector Development beyond 2015: Trade, Exports, and World Market Integration,”  by researchers at the University of Hohenheim reported that EU dairy markets have benefited from exports, while domestic EU consumption is nearly stagnating.  The report observed that increased EU trade has occurred without export subsidies, and price volatility has increased since 2007 because of the influence of the world market. 

Another study considers the impact of an EU supply management system on the dairy sector. The  “Analysis of the Crisis Dairy Supply Management Proposal in the Report of the Committee on Agriculture and Rural Development (COMAGRI) on CAP Report 2012/2013” indicates that an EU supply management policy would give advantages to the EU’s international competitors in the global dairy supply chain.

“It is the world market that will provide the biggest opportunities for the industry. To share in the growth the EU needs to focus on maintaining and enhancing its competitiveness,” said Joop Kleibeuker, secretary general of the European Dairy Association. “The global context of the dairy industry also means that the days of supply management are over.”

For more information, contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at rsaunders@idfa.org.

 
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