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Move is now sure to spark a major surge in production

Published 01/04/2015

Economist and agriculture reporter Richard Wright
Economist and agriculture reporter Richard Wright

Milk quotas were introduced in 1984 to a storm of protest from farmers - yet by this week they were barely noticed. The exodus of farmers from dairying in England meant the UK was never close to quota, and Northern Ireland benefited.

However, elsewhere in the EU production has been stagnant - and there is no better example than the Republic, which now has ambitious plans to increase milk production by 50% by 2020. Milk quotas were introduced to prevent milk lakes and butter mountains bankrupting the Common Agricultural Policy. The EU had an open-ended commitment to buy surplus products, and that - rather than consumer markets - became the main outlet for dairy products.

Quotas could be deemed a success as the CAP did not go bankrupt and surpluses have been curtailed. However, in many European countries they blocked the natural wish of efficient farmers to grow - and their demise will be more celebrated than regretted.

While quotas prevented expansion, that was never a problem here, as the UK was persistently under quota. Farmers spent millions buying in or leasing quota, mainly from England, and while those quotas were once an asset, they ended up with no value. In the 1990s millions of litres of quota were brought in, and farmers and processors, such as United Dairy Farmers/Dale Farm, were able to expand. Elsewhere they were forced to live with production not much above 1984 levels. What is now happening south of the border is simply a catch-up of the expansion Northern Ireland enjoyed.

With milk prices in the doldrums, the focus now is on what effect increased production elsewhere in Europe will have on a market only beginning to recover from a very difficult 2014.

Richard Wright is an economist and agriculture reporter

Belfast Telegraph

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