Rhein on Energy and Climate

In the autumn of 2008 the EU ministers of agriculture had decided to progressively liberalise the European milk market until 2015. To that end, the milk production quotas are to be lifted by 1 percent annually.

This decision put an end to almost 50 years of EU milk market organisation, which fixed milk prices internally and protected EU milk producers against global competition by a sophisticated system of variable import levies and export subsidies.

Within the EU, the quotas shielded small milk farmers against automated big competitors. The sector therefore will undergo a painful transition process that might last the next 10 years, with many of the smaller producing moving out of business.

A global over-production and shrinking demand, due to the world-wide economic crisis, further aggravated the pains of many producers. It was therefore no surprise that Germany and France with a relatively non-competitive dairy industry appealed to the Commission and other member states to slow down the pace of transition and renounce the one percent increase of milk production quotas scheduled for 2010.

The majority of member states and the EU Commission re rejected these arguments. The outcome of the September 7th agricultural minister’s Council meeting to stick to the line is to be applauded for two reasons:

Europe has the potential for a globally viable milk and dairy industry that offers good export perspectives, without any illicit export subsidies.

The decision is a victory for majority voting and political common sense. It demonstrates that an alliance of even the two biggest member countries is incapable of imposing its will on the majority of member states, acting in unison with the Commission and the Council Presidency.

Brussels 08.09. 09. Eberhard Rhein

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