22 May 1998

Dairy industry cant agree timescale to end quota system

By Allan Wright

DISAGREEMENTS between milk producers and processors over the speed at which milk quotas should be phased out flared at the Scottish dairy industry conference in Peebles on Tuesday.

Aberdeenshire icecream maker Maitland Mackie challenged the need for any lengthy period of adjustment. "It is essential that we get rid of quotas. They are stifling rationalisation and they should be gone tomorrow," he said.

He accepted there would have to be compensation and a retirement package for those wishing to leave dairy farming. "But there is no reason why we cannot have that in place very quickly. It is a nonsense to hang around until 2006 before making any change."

Rory OMahony, director of Avonmore Waterford, said that liquid milk consumption in Britain was declining and any future growth would have to come from the manufacturing market.

"The need is to expand our share of the world market and then argue about how the cake is to be divided. But we can only compete in world markets if there is more milk production and that can only come if quotas are abolished," he said.

Scottish Milk chairman John Duncan agreed that quotas eventually should go, but reminded his audience that his co-operative represented a wide range of dairy farmers. "The idea of removing quotas frightens the average farmer who fears he is not efficient enough to survive. Take quotas away and milk production will increase by 10% and the bottom 25% of producers will disappear."

NFU policy director Ian Gardiner supported the dismantling of quotas but argued that it would take a long time, possibly beyond 2006.

"Milk price cuts proposed for the next six years dont begin to prepare an industry to compete in world markets. It worries me that so much time is going to be lost and it worries me that within COPA (the European farmers body) there is only a small minority in favour of dismantling quotas."

However, Jim Begg, marketing director of the Dairy Industry Federation, pointed out that a blocking minority of four countries could prevent continuation of quotas after 2000.