Milk quotas were originally introduced for 5 years, but the expiry date has been put back several times. The final date was decided in the 2003 CAP reform, and reconfirmed in 2008 with concrete steps to provide a “soft landing” by the end of March 2015. Some win -some lose … Romania lose! (but there is still a chance!)
The ending of the EU’s milk quota regime — arguably the most important policy shift in the bloc’s agriculture regime in a generation — will affect farmers in all 28 member states. The biggest winners are expected to be high-yielding, high-value producers in countries such as Ireland, the Netherlands and Denmark. Their less competitive counterparts in countries such as Romania and Bulgaria could suffer.
Mr O’Loughlin is in negotiations to lease 250 extra acres of land from neighbouring stud farms — the rolling grassland of County Kildare is home to much of Ireland’s horseracing industry. His aim is to increase his herd to 230 cows over the next six years, and to raise his annual production of milk from 832,000 litres a year — the amount he is allowed under the EU quota regime — to about 1.5m litres.
“This is the most important policy change for rural Ireland in 30 years,” says Simon Coveney, the Irish agriculture minister.
Milk quotas have long been controversial — an EU policy often associated with outrage-inducing images of farmers pouring milk literally down the drain to avoid the penalties for excess production.
They were introduced to tackle the overproduction of milk in the 1970s that resulted from a generous postwar system of guaranteed prices and subsidised exports — policies that gave rise to a notorious European “butter mountain” that reached 1m tonnes at its peak in the early 1980s.
Still, EU officials argue that the quotas achieved their goal. “We no longer have butter mountains and milk lakes, and we can export what we produce,” says Phil Hogan, the EU agriculture commissioner.
The structural changes imposed by the quotas have been dramatic — especially in a small market such as Ireland, where dairy farms are part of the national self-image. The number of Irish dairy farms has fallen from 65,000 in 1984 to 18,000 today.
Many of those who left were small producers; the quotas tended to favour the bigger farmers. Others abandoned the industry during the Celtic Tiger boom years to take jobs in the then-soaring construction industry, before the Irish economy collapsed and had to be rescued by an international troika of creditors.
Some of those former farmers are being attracted back by the ending of restrictions and financial penalties on excess milk production. The fines imposed by the quota regime are high. Mr O’Loughlin gets 30.5 euro cents a litre for his 832,000 annual litres, but says he is docked 28.6 euro cents for every litre of production above that. From Wednesday, he can produce as much as he wishes.
The Irish aim is to emulate New Zealand’s success as one of the world’s biggest dairy products producers. Both countries produced about 5bn litres in 1984. While Ireland is still around that level, New Zealand now produces about 18.5bn annually — and exports much of that in the form of powdered milk and baby formula to growing markets such as China.
Mr Coveney says Ireland can double its milk production as a result of the end of the quota regime. “I think we will see Ireland as the fastest-growing dairy producer in the world in the next five to 10 years,” he says. Research by Allied Irish Banks shows that two-thirds of Irish dairy farmers plan to increase milk output.
IS THERE STILL A CHANCE FOR ROMANIAN PRODUCERS? YES!
Milk quotas is only for cow’s milk. Other milks represent only a tiny share of the EU milk market. And this might be the chance that Romania can profite!
So … “other” milks or a RON major depreciation!