FDBusiness.com

The EU milk quota regime comes to an end on March 31, 2015. First introduced in 1984 at a time when EU production far outstripped demand, the quota regime was one of the tools introduced for overcoming these structural surpluses. Successive reforms of the EU’s Common Agriculture Policy have increased the market-orientation of the sector and, in parallel, provided a range of other, more targeted instruments to help support producers in vulnerable areas, such as mountain areas where the costs of production are higher.

The final date to end quotas was first decided in 2003 in order to provide EU producers with more flexibility to respond to growing demand, especially on the world market. It was reconfirmed in 2008 with a range of measures aimed at achieving a ‘soft landing’. Even with quotas, EU dairy exports have increased by 45% in volume and 95% in value in the last five years. Market projections indicate that the prospects for further growth remain strong – in particular for added-value products, such as cheese, but also for ingredients used in nutritional, sports and dietary products.

EU Commissioner for Agriculture & Rural Development Phil Hogan states: “The end of the milk quota regime is both a challenge and an opportunity for the Union. 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. Through increased focus on valued added products as well as on ingredients for ‘functional’ food, the dairy sector has the potential of being an economic driver for the EU. More vulnerable areas where the end of the quota system may be regarded as a threat can benefit from the pallet of rural development measures following the subsidiarity principle.”