EU - Milk quotas could benefit Polish producers, says expert
Published:October 20, 2006
Source :Dairy Reporter
EU quotas, which have been criticised for damaging Poland’s dairy production, could actually help the industry to thrive in the EU, according to an industry expert.
Speaking to CEE-Foodindustry, Dr Agata Pieniadz from the Leibniz institute of agricultural development (IAMO) said that the quotas would help to “accelerate structural change, vital to competing with other dairy industries in the EU”.
The claims follow the announcement that dairy producers in the country face fines of €62m for exceeding milk quotas designed to reduce levels of surplus milk in the bloc.
The EU sees the quotas as a vital step in increasing competitiveness in the market by reducing prices and lowering.
Talking about the measures, Dr Pieniadz added that “there will be a lot of positives from the new measures. The quotas will encourage large processors to incorporate a higher level of understanding of for the need of efficient production and improve the quality of produce in line with EU standards.”
Dr Pieniadz accepted however, that the quotas will have some negative impacts. “The social costs are definitely a drawback,” she said, particularly in the case of smaller producers who may suffer under with the new system.
“Regions in the North East of the country are highly concentrated on dairy production, while producers in the South East are only fulfilling 60 – 70 per cent of their quotas. Unfortunately producers are not allowed to trade quotas' with processors outside of their region” she said.
Opponents of the quotas in the country have complained that this is just another step in hindering the market from reaching its full potential.
This has added to the criticism from the country's producers and politicians who claim that the quotas are far too small for a market of their size.
According to figures by Britain's national farmers union, (NFU) of the ten states to gain EU membership in 2004, Poland was by far the largest dairy producer. Last year alone the country produced 12.3 billion litres of milk, accounting for 55 per cent of the new member's entire production.
With the introduction of EU milk quotas, Poland was permitted to produce 8.9b litres a year - a far cry from the 11.2b it hoped to be granted. The EU has added 416,000 next year from its transition funding to help producers cope with the decline, but many feel this is still not enough.
Despite their lack of popularity the measures, have received some support from other sources.
According to a report by the USDA foreign agricultural service these changes are most definitely needed.
“The Polish dairy industry has until the end of December 2006, to fully comply with EU standards. Currently, 75,000 farms (10 percent of quota suppliers) and 55 dairy plants still do not meet EU standards,” said the report.
