Milk quota reform pressure mounting

5 October 2001

Milk quota reform pressure mounting

By Philip Clarke

BRUSSELS is coming under increasing pressure to revamp the milk quota system as it prepares to launch its mid-term review of Agenda 2000 next year.

The latest attack on the current set-up comes from the European Court of Auditors in Luxembourg, which this week issued a detailed report on the operation of quotas.

In its recommendations it calls on the commission to bring forward plans in 2002 to "provide for the ending of the quota regime while ensuring a fair standard of living for dairy farmers".

That is the medium term objective. But in the short term it also wants more flexibility, including cross border trade in milk quotas and a system allowing undershoots in some member states to offset overshoots in others at the end of each milk year.

The comments echo those of UK DEFRA minister, Margaret Beckett, who last week called for an end to milk quotas, to free the industry of their "stranglehold".

The commission is due to issue its views on the future of quotas next year.

But Agenda 2000 already envisages the regime running until 2007-08 and, with dairy markets looking reasonably buoyant, the expectation is that this mid-term review will do little more than set out the options.

The commission has tried to play down this weeks Court of Auditors report, pointing to its inconsistencies.

In particular, it applauds the regime for reducing the cost of milk support. But then it calls for quota cuts to bring supply more into line with unsubsidised demand.

The commission estimates this would require a 20% cut in quota, leading to a k12.5bn (£7.8bn) bill for compensating farmers.

"The court may not like quotas, but it has found no major shortcomings," said a commission spokesman. &#42

"Its job should be to look for fraud and financial mismanagement. It is not a policy making body." He suggested there was no political will among member states to end quotas, anyway.

But EU farmers group COPA, says the timing of the Court of Auditors Report is significant and will put more pressure on the commission in the run-up to the mid-term review.

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