UK DAIRY FARMERS should be better placed to handle the impact of CAP reform than other European milk producers, says one consultant.
John Allen of Kite Consulting said German farmers, for example were hobbled by restrictive labour laws and discount retailers.
And in France, strict quota controls made it extremely difficult to expand and gain economies of scale, said Mr Allen.
“Their industry is 20-30 years behind ours.” Other countries also had to pay far more for quota.
“In Germany it is the equivalent of about 19p/litre and in Holland 136p/litre.”
Mr Allen said UK producers had been forced to become more competitive following industry deregulation and the resulting low prices.
“The pain made us more competitive.” The breakeven milk price for UK farmers was 19p/litre compared with 22p/litre in France, 21.8p/litre in Germany and 20.5p/litre in Holland, he added.
However, aside from lower prices, UK farmers were being severely disadvantaged because the market for cull cows and male dairy calves was so poor because of restrictions like OTMS, said Mr Allen.
“In Europe farmers typically make an extra 3p/litre from these, over here it is only 1.5p/litre.”
Dairy UK should take the lead, he added.