27 October 1998
EU Gang of Four bid to end milk quota

BRITAIN has joined forces with Denmark, Sweden and Italy in a campaign to abolish the European milk quota system.

The proposals have been rejected by seven other countries.

The critics of the milk quota system say consumers pay more than they would in a free market; and that European countries are prevented from fulfilling their export potential.

The European Commission has warned that the system cannot last for ever. It wants a 2% rise in quota levels, and a 15% price cut, for which farmers would be compensated through direct payments related to herd sizes.

Young farmers, under 40, would be given half the quota rise and the rest would go to farmers in mountainous regions.

Ireland is angered at the latter suggestion.

The four campaigning for change want a 30% cut in support prices, compensated by higher direct payments, and a phased rise of 4% in quotas in readiness for their abolition in 2006. They estimate their regime would cost Ecu1.36 billion (£960m) more than the Ecu4.5bn (£3.18bn) a year system suggested by the commission.

Germany and France are the main opponents to change arguing that the current system is stable.

But the four critics have powerful weapon for persuasion. The remit for the current quota system runs out on 31 March, 2000, and they have enough votes for a qualified majority against renewal. EU countries are expected to agree a compromise.