EU milk quotas should be scrapped - Fischer Boel
EU - Signs that EU milk quotas have outlived their usefulness grew stronger this week after the bloc’s agriculture commissioner openly criticised the system in front of industry officials.
26 January 2007
5 minute read
Her comments offer the strongest signal yet that the Commission will propose to end the milk quota system as part of next year's dairy industry review.
“In my opinion, quotas do not sharpen competitiveness; they stifle it. They should go,” Fischer Boel told delegates.
“The Single Farm Payment unties farmers' hands to produce what the market wants. Should we untie their hands but keep their feet tied up with production quotas? Surely this is inconsistent?”
Many in the European dairy industry agree with her views, believing quotas are losing their relevance.
To continue reading this article please click here
From Dairy Reporter
Narrative of Meeting with the European Dairy Association - Brussels, 23 January 2007
Prospects for the European Dairy Sector
Ladies and gentlemen,Let me first say a warm thank-you for inviting me this evening. It's always a pleasure to talk to the European Dairy Association.
Even though I'm speaking before dinner, I have been advised that my comments for this evening should be like a good cigar to be smoked after the meal: firm enough for you to chew on, and not so strong that it gives anyone a choking fit! You will have to be the judges of whether my contribution passes these tests. I should admit straight away that what I tell you this evening will have a large gap.
When I spoke to European dairy farmers in Denmark last June, they forgave me for spending only about 30 seconds talking about a very important topic - the WTO Doha Round. This was because the talks had reached a crucial point, and I promised that we would have greater clarity "very soon".
Seven months later, I'm still waiting! It's a good thing that I'm an optimist.
High-level contacts are taking place between the leading players in these negotiations, including the European Union. Trade Commissioner Peter Mandelson and I are playing our part. Any breakthrough will have to come soon if it comes at all. But this is all I can tell you today about the Doha Round. Watch this space for further news! However, in the meantime, our thinking about domestic policy can't mark time. The Commission is at work on a number of projects. Two with relevance to the dairy industry are, of course, the "CAP Health Check" and the general review of the European Union budget.
Let me remind you what these are about.
In the Health Check, we will examine whether the reformed CAP is functioning as it should – in a European Union of 27 Member States, and in the foreseeable international context. We will make adjustments if necessary.
The Budget Review involves a different task: thinking about what the CAP could and should look like after 2013.
The possible content of these two exercises of reflection is considerable, so let me limit my comments to key points most directly relevant to the dairy industry.
The Health Check will involve taking a close look at our various Common Market Organisations – and within them, at our traditional market tools.
With regard to the dairy regime, we could reasonably ask questions about intervention, aid for private storage, and our various internal disposal measures. Answers to these questions would take into account the imbalance between demand for fat and for protein, as well as the declining usefulness of the internal disposal measures. They would also take into account the likelihood that we should rely less and less on export refunds, whatever happens in the Doha Round. Within the Budget Review, the very existence of traditional market management tools after 2013 could be open to question.
Another very important issue which we have to examine in relation to the period after 2013 is, of course, that of milk quotas. I'm sure you know that I have recently taken a firmer line about their future. Essentially, I believe we should not renew the milk quota system when it expires in 2015. I think I can see growing opposition among Member States to the idea of extending the system. But I will leave this point to one side. I myself see firm grounds for letting quotas come to an end.
Among other things, the CAP reforms of the last few years are designed to make European farming more competitive. This is one of the central goals of decoupling.
The Single Farm Payment unties farmers' hands to produce what the market wants. Should we untie their hands but keep their feet tied up with production quotas? Surely this is inconsistent?
In my opinion, quotas do not sharpen competitiveness; they stifle it. They should go.
2015 is still some time away. But the dairy sector is very capital-intensive. So if the writing is on the wall for milk quotas, there must be clarity about this sooner rather than later, so that the industry can begin to prepare.
This raises another question: In what way could policy support those preparations?
One possibility is a general expansion of quotas before the system ends. In fact, a review clause in the dairy reform of 2003 sets out this issue as a central topic to be addressed in a report on the dairy market, which the Commission must deliver by the end of 2008. (This report will, of course, contribute to the Health Check.) A quota expansion could make sense. If we are planning to untie farmers' feet (to use my earlier metaphor), should we not first loosen the rope a little, to help them get used to the idea of full mobility?
Other options for "transitional measures" may also merit examination. But the important point at this stage is for me to make my opinion clear: milk quotas should not get a new lease of life after 2015.
Mariann Fischer Boel - Member of the European Commission responsible for Agriculture and Rural Development
TheCattleSite News Desk
