The Commission's approach to the dairy sector is explained
20 May 2004
Addressing the International Dairy Federation on September 25th
2002, Commissioner Fischler explained the options in the dairy sector
that are currently under review:
-
first option: to maintain the present status quo, that is to
implement the decisions already taken in Agenda 2000 and to continue
the quota regime after 2008 at the 2007/2008 quota and price levels; -
second option: to repeat the Agenda 2000 approach, i.e. continuation
of quota after 2008 with an increase of 3% as well as another
price decrease of 15%; -
third option: to introduce a two tier quota regime an 'A' quota
for the internal market and a 'C' quota for export, at world market
prices; -
fourth option: to abolish the quotas after 2008. Prices are
expected to drop by 25% in this case.
The Commissioner pointed out that as a result of Council decisions
taken in Berlin in 1999 the Commission favours a gradual approach,
since this tends to provide a smoother path for adjustment than
outright quota abolition.
The Berlin decision to postpone dairy sector reform means that
none of the benefits of reform can materialise until after 2008.
However, the Commission remains open to accelerating the timetable
for the implementation of dairy sector reform if this is the option
favoured by member states.
Mr Fischler did, however, point out the implications of the direction
of the mid-term review proposals for the dairy sector, namely that:
'in the future, farmers will receive direct support not in order
to produce a specific product, such as cereals or beef, but in order
to provide the level of environmental benefits and quality products
that the public wants.'
In discussions at the October Agricultural Council meeting Commissioner
Fischler indicated that member states were divided into three groups
on dairy sector reform, with some favouring lowering prices towards
world market prices levels, despite the budgetary implications this
would have. However he indicated that at the present time there
was no indication where a consensus on the direction of change would
take dairy-sector policy.
Editorial comment
Developments in the EU dairy sector will have important implications
for ACP dairy and beef producers as two-thirds of EU beef is produced
from the EU dairy herd and 70% of all African dairy imports originate
in the EU.