1 November 1996

…Quotas – Irish are lukewarm on As & Bs

A RECENT report from the Irish, who hold the EU presidency, reaches similar conclusions to the NFU "Options" report.

It believes the arguments for A and B quotas are "unconvincing" as internal prices would come under pressure anyway.

Maintaining the status quo is also ruled out, not least because of the impracticality of extending quotas and price support to east European countries waiting to join the EU.

One way of maintaining quotas would be by cutting prices in line with lower import tariffs. Unlike the NFU, the Irish suggest extra consumer demand due to lower prices could avoid the need for quota cuts. Producers would also be compensated according to farm size, age of farmer, quality of land etc.

A more radical measure would be to cut prices and abolish quotas overnight. This would be more compatible with the EUs policy of enlargement and would achieve a similar end faster. "A price cut of 15% may sound severe, but it would merely be bringing forward reductions which would take place a few years later anyway," says the report.

"Abolition of quotas need not be as intimidating as many now fear. Budgetary capacity should be sufficient to allow substantial, if not full income compensation."