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EU to end milk quota on March 31

Xinhua, March 27, 2015 Adjust font size:

The European Union (EU) said on Thursday its milk quota regime will come to an end on March 31, a move aiming to increase the market-orientation of the dairy sector and boost exports of dairy products.

The EU milk quota regime was 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.

"The situation today is completely different to that in 1984 with this more market oriented sector. You will recall that those were the days of butter mountains and milk lakes," said Phil Hogan, the EU commissioner for Agriculture and Rural Development.

The decision to end the quota regime was made in order to provide EU producers with more flexibility to respond to growing demand, especially on the world market. Even with quotas, EU dairy exports have increased by 45 percent in volume and 95 percent in value in the last 5 years.

"We are now more competitive in world market prices. Intervention prices are set at a level that does not encourage surplus milk production and we are able to export 11 percent of our milk production without any kind of subsidies at all," Hogan said.

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.

Hogan added that the EU will introduce new market mechanisms to prevent any disorder in the dairy sector after abolishing the quotas. For example, the European Investment Bank will assist member states to restructure the dairy industry with a new financial instrument. Endit