'Soft Landing' for Abolition of Milk Quotas
EU - In order to ensure a smooth transitional phase the EU has opted for a 'soft landing' approach in regards to the abolition of milk production quotas within Europe.
10 April 2008
2 minute read
Ne research by the by the Institut d'Economie Industrielle suggests that a gradual increase in milk production allowances would ensure steady prices for producers and processors during the switchover towards a no quota system, preventing a possible price shock.
According to the Daily Reporter, the report's findings are likely to support current EU policy on gradually lifting production quotas for milk as part of plans to improve competitiveness of the without having to rely on government support.
Quota plans
The study, which has been funded by the European Union, looked at four different scenarios for phasing out the quotas, says the Daily Reporter.
They say that two of these plans are identified as being 'soft landing' plans that propose a gradual quota increase annually of between either one or two per cent, ahead of a complete repeal of the quotas between 2015 to 2016.
Two other strategies considered by the report, which were viewed by the authors as 'hard landing' solutions, propose removing quotas either by 2009 to 2010, or 2015 to 2016 without gradually increases in production.
The report suggested that adopting the 'hard landing' solutions would offer some benefit to lower cost dairy producers, though the expense of adjusting to non-quota production would possibly be higher.
By contrast, although the impact of gradual quota increases was expected to vary among member states, the quota increases would be partial fulfilled, the researchers claimed.
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