Anthony Gibson: Thirty years of #milk quotas have left UK dairy farming a shadow of what it could have been

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It was 30 years ago this month that quotas were imposed on milk production. Thirty years! For a system that was only supposed to last for five.
 
It was a traumatic time. Although quotas had been talked about for at least two years, there was always the feeling that, when it came to the crunch, Europe’s farm ministers would, as usual, give way to the French and step back from the brink. But they stuck to their guns, and by the end of that month, dairy farmers were out on the streets, in Exeter, Taunton, Bristol and many other towns and cities across the country, complete with cows, tractors and banners warning that «quotas kill cows».
 
It wasn’t so much the fact of quotas, as the way in which the basis for fixing them had penalised the UK in general, and the South West in particular. Britain was only 85 per cent self-sufficient in milk, as compared with the Netherlands, for example, where they were producing three times as much as they could consume. Yet, thanks not least to a feeble negotiating effort by the British minister Michael Jopling, no allowance had been made for the extent to which a particular country was contributing to the over-production problem.
 
On top of that, the system was loaded against the West Country’s smaller, more traditional spring-calving herds, many of which had suffered a dismal time, thanks to a wet spring and hot, dry summer, during the 1983 base year, and ended up with allocations that were tens of thousands of litres below what they would expect to produce in a normal year. Conversely, for those who had been expanding, and had arguably been most responsible for over-production in the first place, the impact was much less severe.
 
So, instead of protecting smaller dairy farms from the consequences of over-production, quotas served only to accelerate their demise. It has been a similar story throughout the life-time of the system: fine for the haves; cruel for the have-nots. The more you interfere in the normal operations of the market, the more perverse the outcomes.
 
I wonder what sort of dairy industry we would have now, had all of the millions of pounds which have been spent on buying and leasing quotas over the last 30 years, been invested instead in cows, buildings and technology. We would probably be world leaders, instead of limping along in the wake of the New Zealanders.
 
Still, 12 months from now, quotas will be no more. European dairy farmers will be free to produce as much as they like, without the fear of crippling financial penalties. What will be the consequences? Boom, followed by bust? Or will we see, as we ought to if the market works properly, a gradual migration of milk production to those areas of Europe best suited to it, areas which obviously include the south-west of England?
 
That must be the hope, if not quite the expectation, given that the UK Government seems to be much less committed to realising the potential of its dairy industry than, say, Ireland, Denmark or the Netherlands, where they are already gearing up for massive expansion.
 
In the meantime, all eyes are on milk price. Apparently, it all depends on Chinese baby food. If that market continues to mop up vast quantities of milk powder, then all should be well.
 
That’s globalisation for you, I suppose. It makes for a volatile and challenging environment, but one which is also much more likely to provide the reinvigoration that the dairy industry needs after 30 years beneath the dead hand of quotas.
 
Source: Western Daily Press

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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