Prospect for milk quota increases next year

The UK Farmers Guardian reports that Mrs Fischer Boel was forced to confirm that allowing an increase in milk production would be addressed as part of the Commission’s Health Check proposals expected in November after Germany raised concerns about rising retail prices. The Commission has a number of options, including an annual market-linked increase in quota, a reduction in superlevy, or the scrapping of restrictions on the transfer of quota between member states. A number of member states have already sought a quota increase. As I argued yesterday, increasing milk quota without at the same time sending a signal that current levels of dairy protection must be reduced by lowering support prices is likely to encourage farmers into an unsustainable increase in investment with considerable pain to follow when quotas are finally eliminated in 2015.

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