Commodity Watch – Europe without Milk Quota – What lies in store?
Milk quota will be a thing of the past on 1st April 2015.
Milk Production Restrictions were introduced by the EEC on April 2nd 1984, under the Dairy Produce Quota Regulations of 1984 and were originally due to run until 1989, but have been extended many times since. What was meant to be a short term measure became an integral part of our industry in Northern Ireland and throughout the rest of the EU.
Locally, we saw an interesting development in that the quota regime in the UK allowed the Northern Ireland Dairy industry to develop into the 2nd largest milk producing region in the UK and develop a position of strength. In 1984, NI had an initial quota allocation of 1,322m litres. Production in 2014 was 2,190m litres. Over the same period, the average dairy herd size has increased from 37 to 94 cows. This means that we will enter the new post quota world in a relatively strong position in that we are capable of producing a steady stream of milk of milk with a lower peak-to-trough ratio compared to other milk producing countries.
The farming press has been dominated with talk of superlevy in some EU Member States and the industry has been talking about how much volumes will rise once the limits are ended. There is a much speculation and no is prepared to put their necks on the line as to what is going to happen one way or another and there is a certain amount of uncertainty as to how it pan out.
What is certain though is that we all knew that this day was coming. The decision to abolish quota was made by the EU in 2008. Brussels decided upon a gradual programme of elimination introducing a soft landing initiative which would soften the impact, and this meant that businesses had time to adapt.
Aside from the added uncertainty, there could be positivity to be gained from the new post quota dairy environment in Northern Ireland. The likelihood is that with adequate processing capacity being in place, there will be greater competition amongst processors, which will be a positive for our dairy sector. In addition, quota abolition could lead to improved efficiencies, both at farm and processor level. Finally, there is likely to be an open debate on the role of milk contracts in a post quota world.
In preparation for the final farewell to milk quota, the Society of Dairy Technology in conjunction with CAFRE will be hosting a conference on 1st April at Loughry Campus, Cookstown. The title of the Conference is “Future in Focus – The Dairy Industry in a Post Quota World” and will provide a valuable insight into what opportunities and challenges our Industry will face in the future. Speakers include COPA Chairman Mansel Raymond, Dale Farm Chief Executive David Dobbin, Michael Faherty from the Irish Dairy Board and Sophie Delaine from DG Agri in Brussels as well as selection of Europes leading dairy technologists.
Anyone interested in registering, there is a Farmer Rate of £25.
Further details and a booking form can be obtained from the SDT website (http://www.sdt.org) or by contacting Gary Andrews at CAFRE on 028 8676 8270 or emailing gary.andrews@dardni.gov.uk
