The EU's decision to lift more than 30 years of milk quotas has German and Irish dairy farmers cheering. But, as Ciara Lee reports, hard-pressed suppliers elsewhere see danger of a price collapse.
A fresh offensive between farmers and the European Union. These farmers fearing what an EU decision to scrap milk quotas will do to their livelihood. Brussels wants to boost global competition. But farmers say the move could flood the market with cheap milk, putting smaller players out of business. Sieta van Keimpema is from the European Milk Board. (SOUNDBITE) (English) VICE PRESIDENT OF THE EUROPEAN MILK BOARD, Sieta van Keimpema, SAYING: "The percentage of farmers, young farmers under 35 years of age in Europe, is six percent. So there is no perspective. Farmers need perspective, and they also need market regulation systems. So that in crisis situations you can involve yourself in the market, and you can make sure we have a short crisis and not a very deep and long one." The news could lead to expansion opportunities for some dairy farmers though. Quotas were first introduced over 30 years ago when EU supplies outstripped demand. Top producers Germany and Ireland say their removal is a good thing. Ireland predicts it will create over nine thousand extra jobs, and over a billion euros in additional export revenue each year. Seven Investment Management's Justin Urquhart Stewart. (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT'S JUSTIN URQUHART STEWART, SAYING: "Now remember it is not just the milk itself, it is the product. It is the cheese, the yoghurt and everything that goes with it and the ability to sell that into other areas. So Ireland is very keen to sell that into the UK. Meanwhile the UK needs to react and get more of its own production up." Those against the move say small farmers are being pushed out of the market. Already low milk prices expected to halve without quotas. British farmers are particularly worried. Urquhart Stewart says the outlook for them might not be all bad. (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT'S JUSTIN URQUHART STEWART, SAYING: "We've seen some reforms in the budget in regards to variability of tax to farmers and that will certainly help during this lean time. But the removal of quotas will lead to a more open market. Just as we saw changes in New Zealand that finally benefitted them, so I believe we will see this in the euro zone and in the wider EU including the United Kingdom." Dairy farmers often struggle with price volatility, But the European Commission is expected to create a safety net for producers to help them adjust to any price fluctuations. It also wants to reward farmers with a bonus, IF they produce less in a surplus crisis.