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EC Forced to Reconsider Dairy Regulations?

04 November 2008

EU - As dairy processors and farmer continue to fret over declining profitability in their operations, the European Commission may be forced to reconsider its position on loosening regulation of the market, says a new report.

After prices paid for raw milk spiked during the middle of last year, they have since began to fall continuously through 2008 with the Commission yet to intervene at either internal or external level, writes Neil Merrett for Dairy Reporter.

“The situation may change towards the beginning of 2009,” stated the USDA, as part of its latest Foreign Agricultural Service report on dairy. “Growing supplies, lower competitiveness of European dairy products on the world market and stable domestic consumption will put strong pressure on the EU authorities to build intervention stocks, subsidize consumption, or re-introduce export refunds.”

Last June, the decision was taken by the EU’s dairy management committee to temporarily revoke subsidies on all exported dairy products for the first time in the export refund scheme’s 40 year history, amidst record payouts for the products from processors.

According to the Dairy Reporter, while the decision was always potentially regarded as a temporary measure during the enactment of wide-sweeping Common Agricultural Policy (CAP) reforms to deregulate the market, the report’s conclusions could indicate a setback to free trade.

TheCattleSite News Desk



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