Mixed blessings for Poland as EU scraps milk quotas

The end of the milk quota system is a boon for around 146,000 Polish dairy farmers, who no longer have to worry about limits to milk production, although smaller producers have raised concerns about the move.

Poland has twice exceeded the EU’s milk quotas: first in 2005/2006, and then in 2013/2014, as well as 2014/2015, with 6-7 percent overproduction possibly exposing Warsaw to a fine amounting to as much as PLN 800 million.

Due to the current low price of milk, Poland has already been granted permission to pay the fine in three installements.

While the vast majority (135,000) milk producers in Poland are active on an industrial scale, there are still as many as 11,000 local producers who sell milk individually. These producers have raised concerns that a scrapping of the EU’s milk quotas may cause a drop in prices as competitiveness gains ground.

“The abolition of the quotas will obviously always raise issues on price volatility, but we continue to have a market mechanisms available to us in the event of a serious crisis,” EU Agriculture Commissioner Phil Hogan said in Brussels, Thursday.

“I will continue to remain vigilant in case there is a major threat to the milk market,” Hogan added.

The European Union is globally a top producer of dairy products alongside the USA and New Zealand. In the past five years, EU exports of dairy products has risen by 45 percent to non-EU countries in terms of volume and 95 percent in terms of value.

Market forecasts are positive for the sector, especially for cheese manufacturers. (jb)

Source: PAP/IAR