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Farmers protest over milk quotas

Dairy farmers have hit the streets of Brussels to protest against the lifting of European Union milk quotas, fearing that the move will flood the market with cheap surplus milk.

"With quotas being lifted, we're really scared that production is going to explode and we won't be able to pay our costs any more," said Belgian milk farmer Yvan Deknudt after driving his tractor some 30km (19 miles) to a rally at the European Parliament.

The quota system that kept a lid on production will be scrapped tomorrow, more than 30 years after it was introduced to try to halt massive overproduction that had resulted in so-called milk lakes and butter mountains in the EU.

The system is ending to allow European producers to compete with US and Australian farmers targeting the burgeoning markets of countries such as China and Korea.

The move was announced in 2003 and quota levels have been raised progressively over the last seven years to get farmers used to producing more milk.

But for small farmers like Mr Deknudt, 54, the extra produce has already driven the wholesale price of milk down, some 30% lower than the minimum he needs to break even.

"My son has given up on the idea of producing milk. We have a great farm. It's a shame for it to go to waste," he said.

Mr Deknudt is one of a group of around 50 farmers from 16 countries taking part in the demonstration.

Though quotas were criticised, they did provide some price stability. The big fear for small farmers is that production will no longer be based on the amount of milk being consumed.

They say that will only benefit big food companies and could lead to milk being dumped abroad.

"It serves no purpose to raise production and dump milk on other countries, as is the case in Africa today, which is destroying smaller producers both in Africa and in Europe," said European Milk Board spokesman Erwin Schoepges.

Mr Deknudt and his colleagues booed and blew their horns as they set fire to company flags in a protest against what they see as a power-grab by the big conglomerates.

Black smoke wafted high into the air in front of the EU parliament building.

The EU has played down concerns about a slump in prices. Its executive Commission has created an observatory to monitor prices and production trends, a sort of early warning system for farmers.

Some EU payments and investment support are also available for those in trouble, but nothing like the generous subsidies of the past.

"We don't want bonuses, we don't want subsidies. We just want to be paid for our work, to pay for our farm," said Mr Schoepges.

Meanwhile big companies in Ireland, Germany, Denmark and the Netherlands stand ready to step up production.

The EU's top farm official, Phil Hogan, welcomed the move, saying it "represents the opening of a new chapter - a new era without production constraints".

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