Loading...

Anticipation and angst over milk quotas

Mar 29 2015 14:09

Paris - European dairy farmers are facing the end of three decades of milk quotas on Wednesday with a mixture of anticipation and angst as it will allow them to serve growing demand in emerging markets, but could also cause a crash in prices.

Farmers will be allowed churn out as much milk as they want from 1 April.

While the quotas had been increased in recent years - growing 1% a year between 2009 and 2013 --- the complete liberalisation of the market is seen as a game changer for producers.

In northern Europe, farmers have hailed the move as a chance to cash in on the growing global thirst for milk, particularly in China.

Ireland has already announced plans to boost its milk output by 50% by 2020. The Netherlands and Germany, Europe's largest producer, are gearing up for increases of 20%.

Butter mountains

"We're happy the quotas are being scrapped. We're prepared," said Karl-Heinz Engel, president of the German dairy industry association, MIV, insisting that the sector was "export-orientated and competitive".

But many farmers in France, Europe's second-biggest milk producer, have adopted a wait-and-see approach, preferring to wait for the demand to pick up before ploughing money into boosting their output.

The quotas were introduced in the mid-1980s to staunch the infamous milk lakes and butter mountains that had built up on the back of generous EU production subsidies.


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

france  |  agriculture

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.
 

Company Snapshot

We're talking about: STEINHOFF

Steinhoff International, once the darling of fund managers, risks falling out of the JSE top 100.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

If SARB keeps interest rates the same this afternoon, how will this affect your personal finances?

Previous results · Suggest a vote

Loading...