MILK QUOTAS END 31 MARCH

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MILK QUOTAS END 31 MARCH
30 Mar 2015

MILK QUOTAS END 31 MARCH

Brussels Daily

MILK

On 31 March 2015 the EU milk quota regime comes to an end. On this page you will find a selection of relevant information around this event.

First introduced in 1984 at a time when EU production far outstripped demand, the milk quota regime was one of the tools introduced in 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 5 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.

 

Timeline

1970s and 1980s

The system of guaranteed prices at a level well above world market prices leads to a structural surplus, with the European Commission obliged to buy in large volume of butter and Skimmed Milk Powder into public intervention. On occasions these “mountains” exceeded 1 million tonnes for both SMP and butter.

1983

European Commission proposes the introduction of milk quotas. Rules agreed by EU Agriculture Ministers in March 1984.

1984 (April)

Milk quotas enter into force.

CAP reform

Successive policy reform exercises  (in 1992, 1999, 2003) see a reduction in the system of guaranteed prices, and in return farmers were paid a Direct Payment in order to stabilise revenues.

Most of these payments were then “decoupled” from production – further enhancing the market orientation of EU agriculture.

For the dairy sector, following the reduction in the guaranteed price from 2003, producer prices picked up and have developed positively, with fluctuations.

Other CAP tools, such as payments for less favoured areas, are aimed at providing additional support for vulnerable regions.

At the same time, Rural Development Programmes have provided options to individual farmers to apply for additional funding. For example, 1.4 billion EUR of EU funds from 2007-2013  stimulated more than 10 bn EUR of  Farm Modernisation Investments in the dairy sector from 2007-2013.

2003

CAP “Mid Term Review” deal agrees that milk quotas should be abolished in 2015.

2008

CAP “Health Check” confirms that milk quotas will expire end of March 2015, and agrees gradual increase in quotas for 5 years.

2012

Council and EP agreement on Milk Package – a policy response to the 2009 dairy market crisis – including new rules on contracts and improving collective bargaining for producers.

2013 

CAP Reform agreement includes substantial changes to Direct Payments system, including options for Voluntary Coupled Support.

September 2013

At Conference on EU dairy sector after 2015, Commission announces EU Milk Market Observatory aimed at increasing market transparency.

31 March 2015

End of quotas

Further information

Short video clips

 

Milk Market Observatory (MMO)

The aim of the MMO – introduced in April 2014 – is to provide the EU dairy sector with more transparency by means of disseminating market data and short-term analysis in a timely mannerand to foster the dialogue between market analysts along the milk supply chain.

>> Go to the MMO

 

Milk market situation

Monthly updated slide-show.

>> Go to the latest update [2 MB]

 

Short-term outlook for EU arable crops, dairy and meat markets

Based on reflections of market experts within the European Commission, using the latest data available.

>> Go to the Winter 2015 edition

 

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