11 April 1997

French against end to quota

By Shelley Wright

FRENCH dairy farmers will not support any moves to phase out milk quotas, says the boss of Frances largest milk co-operative, Sodiaal.

In London to sign a new four-year marketing deal with Dairy Crest, the co-ops chief executive, Nicholas le Chatelier, said the British governments view that there should ultimately be a free market had no support in France.

With average dairy farm size across Europe less than half that in the UK, there was no will to see quotas removed. Farmers wanted to retain some form of production constraint to maintain milk price.

But, if the current system could not be maintained, French farmers would accept its replacement with a two-tier system. "A quota" would cover milk for the EU market, with "B quota" used to produce milk for unsubsidised export.

It is still unclear, however, whether or not such a system would be compatible with World Trade Organisation rules. The US has already voiced concern that A quotas, which would restrict domestic supply and so keep prices up, could be used to subsidise B milk for export.

While most EU producers have seen their milk prices fall in recent months, the same has not happened in France. "Our farmers tend to react strongly to things like that and so it takes us about six months longer than any one else to drop prices," Mr le Chatelier said.

Sodiaal is a vertically integrated co-op, with 17,300 dairy farmers from all over France supplying 2.5bn litres of milk, equal to about 10% of national production. The current net ex-farm price is about 20.9p/litre for milk of 3.7% butterfat and 3.2% protein.

Dairy Crest has worked with Sodiaals fresh dairy products division, Yoplait, for five years.n

Dairy Crests John Houliston and Sodiaals Nicholas le Chatelier sign up for another four years of marketing Yoplait in the UK.