24 November 1995

Select committee milk inquiry gets short shrift…

By Shelley Wright

ATTEMPTS by MPs to alleviate the shortfall between milk supply and demand in Britain were rejected by MAFF this week.

Opening its inquiry into the UK dairy industry and the CAP dairy regime on Wednesday, the agriculture select committee repeatedly quizzed MAFF officials on how the country could move forward from its current position of being only 85% self-sufficient in milk.

MPs on the committee asked about schemes like cross-border trading of quota and the introduction of a two-tier quota system. They also asked if there was a possibility of the UK winning more quota from Brussels.

But Geoffrey Hollis, head of MAFFs livestock group, immediately dismissed the possibility of a quota increase. Recent speculation that the European Commission planned to increase quotas by 1% by reducing the butterfat co-efficient was unfounded, he said. There was virtually no chance that the commission would take such action, especially so late in the milk year, he added.

The government wanted to see the eventual abolition of milk quotas, so the idea of further complicating the existing system by adding "B" quota to create a two-tier scheme was not acceptable Mr Hollis said. He added that introducing B quota would greatly increase the threat of fraud. And cross-border trading was unacceptable to most other EU member states so would not be adopted.

Mr Hollis told the committee that he predicted that quotas would continue beyond 2000, and that the current CAP dairy regime would continue for the foreseeable future. But he criticised the cost of the regime and said it presented a major obstacle to rational development of milk production in the community.

Turning to any future CAP reform, Mr Hollis stressed that the government was committed to reducing price support not quotas. But any changes would have to be gradual, giving farmers as much time as possible to adapt. If price support fell then market prices would also begin to fall, ultimately eliminating the value of quota to the extent that they could then be removed.

It was better to move in that way because if quotas were cut then production and hence consumption would fall. &#42