The days of the unpopular EU milk quota system look numbered. It was set up in 1984 to limit the amount of milk individual farmers can sell to ensure national production is kept below quota. If the national quota is exceeded, each farmer who exceeds their own quota has to pay a penal levy. Flexibility on the transfer of quota between farmers varies in different member states but, in the UK, buying and leasing of quota has been relatively straightforward.
It has entailed a substantial cost to UK farmers who wish to expand their production, and millions of pounds have been invested by those who see expansion as their only chance. Quotas have acquired a significant capital value - a situation that was never intended. Another feature of the system has been the numerous stories of black-market milk avoiding the quota system and the non-payment of levies.
The government has advocated the abolition of the quota system and appears to have a strong ally in the EU Commission. In fact the EU agriculture commissioner, Mariann Fischer-Boel, recently told the European Dairy Association she believed the milk quota system should not be renewed when it expires in 2015. She said quotas do not sharpen competitiveness and 'they should go'. She said she planned to expand the system until it became irrelevant as a limit on production.
Quota abolition in the UK seems academic as national milk output is already failing to come up to the permitted quota level. But even after the collapse of quota prices, farmers often still feel the need to cover their risk by buying in or leasing extra quota. On the whole, agreement to end the system when the EU reviews the operation of its dairy policy next year would be a welcome step and, if nothing else, would get rid of the red tape in operating and monitoring the milk quota system.
It has entailed a substantial cost to UK farmers who wish to expand their production, and millions of pounds have been invested by those who see expansion as their only chance. Quotas have acquired a significant capital value - a situation that was never intended. Another feature of the system has been the numerous stories of black-market milk avoiding the quota system and the non-payment of levies.
The government has advocated the abolition of the quota system and appears to have a strong ally in the EU Commission. In fact the EU agriculture commissioner, Mariann Fischer-Boel, recently told the European Dairy Association she believed the milk quota system should not be renewed when it expires in 2015. She said quotas do not sharpen competitiveness and 'they should go'. She said she planned to expand the system until it became irrelevant as a limit on production.
Quota abolition in the UK seems academic as national milk output is already failing to come up to the permitted quota level. But even after the collapse of quota prices, farmers often still feel the need to cover their risk by buying in or leasing extra quota. On the whole, agreement to end the system when the EU reviews the operation of its dairy policy next year would be a welcome step and, if nothing else, would get rid of the red tape in operating and monitoring the milk quota system.
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