Goodbye to Milk Quotas!

On April 1, 2015, the milk quota system in the EU was lifted. Ending a system that had governed the European dairy sector for over 30 years, the move significantly changed the playing field for milk farmers in Europe. 

First introduced in 1984, the quota system came at a time when EU production far outstripped demand. Designed to avoid overproduction and stabilize prices, the system included individual and national production quotas on cow’s milk, with a levy payable for those who exceed their quota. It also guaranteed EU farmers a set price for milk, regardless of demand.  Today however, these changes mean farmers in Europe can produce as much milk as they want.

One of the main reasons given for the removal of the quota system was the increase in consumption of dairy products outside of Europe, in particular Asia and Africa. With new markets developing, the quotas were seen as restrictive by some, preventing opportunities for increased production and business growth. For others however, these changes have presented a concrete threat to their livelihoods, primarily small-scale farmers. Those who staged a protest in Brussels the day before the quotas were abolished made these concerns clear.

On the second day of Cheese, we took a look at some of challenges these changes pose to small-scale producers and how best to address them. The panel consisted of Gaetano Pascale, President of Slow Food Italy; Rossend Doménech, journalist; Laurent Pinatel, Confédération Paysanne; and Giorgio Ferrero, councilor for the Department of Agriculture and Fisheries of the Region of Piedmont. French journalist Gilles Luneau chaired the conference.

The main challenge for small-scale milk producers is the increased competition from livestock farms with huge productive capacities. In a system without regulation, driven by the market and little price regulation, the winners will always be those who produce the largest quantities for the smallest amount of money. Laurent Pinatel said milk quotas were necessary to organize production and to compensate for surpluses and imbalances. He explained how after quotas were removed, some bought new livestock, thinking they would increase production. However as China turned to New Zealand and Australia, and the Russian embargo on European products was introduced, this anticipated new market soon evaporated.

As Slow Food Italy President Gaetano Pascale pointed out, it is first the small-scale producers that are affected and then consumers. The trend towards larger farms implies a lowering of quality for consumers. The quality of European milk, which historically was the result of diversity, different regions and dozens of dairy cow breeds, is being increasingly abandoned in favor of a type of quality based on numbers.

Asked for a solution to this problem, Giorgio Ferrero, suggested that greater differentiation between products is required, in particular information regarding how the milk was produced. He said that if milk continued to be devalued in such as way, it could become seen as a by-product for other milk derivatives with greater value, such as casein. Slow Food also believes that the recovery of a national identity, the possibility of indicating the place of production, but especially, being accountable to the consumer about the cows’ diet and adhering to the most advanced standards of animal welfare could contribute to recovery for small-scale milk producers.

Laurent argued that a form of market regulation is still required stating, “We as milk producers depend on EU institutions for regulation; the market alone will not regulate.” He also said there was a need to re-localize economies and change production systems. He also emphasized the power of consumers and how they need to become more aware of their purchasing power. He added that small-scale producers need to find new revenue sources and diversify. Farms could for instance produce natural gas, electricity and therefore cheaper milk of a high quality.

Doménech presented another solution, saying what was most urgently required was greater clarity at the European level in terms of who is talking to whom. He said that all meetings need to be documented, and a EU-wide lobby group of craft milk farmers should be formed. He also built on the ideas of labeling presented by Slow Food and transparency presented by Ferrero, stating that there is a need to create a brand or range of milk products that are recognized for their quality. He said the most important thing for consumers and consumer choices is reassurance and information.  If consumers were able to identify the difference in the milk they are buying, the value of milk would return.

It was a different sentiment echoed by Doménech however that resonated most strongly with the audience. “It is not acceptable that people who work day in day out to produce a quality product must always defend themselves or fight for their livelihoods!” he told the audience. The question as to whether quality, the revival of the local supply chain and indication of origin may be a resource to enable small-scale producers to differentiate themselves remains to be seen. We hope however, that there will one day be no need for milk producers to take to the streets to protect a way of life that has been in their families for generations.