Fears the UK could be flooded with cheap imported dairy products are growing after the EU agreed concessions allowing certain member states to increase production.
In the run-up to the abolition of milk quotas in 2015, EU states will be allowed to raise their quotas by 1% per year from next April. Italy has been granted its full 5% increase from 2009 to give it an outlet for its vast dairy production.
Crucially, countries such as Ireland have also won an extra 1% quota increase per year on the back of an adjusted butterfat co-efficient that effectively allows them to boost production.
In Ireland's case, that would equate to an increase of 500 million litres of milk in the next five years, worth over £100m in extra sales.
With UK milk production falling and the country's dairy farmers not expected to fill their quota, there are fears Irish and other EU producers will increase exports of cheese and other dairy products to the UK, driving prices down.
"I deplore the back-door deal which could allow Ireland to get a higher milk quota increase," said NFU president Peter Kendall. "If this leads to extra production it will impact on our market. I expect [Defra secretary] Hilary Benn to fight to ensure British farmers are not disadvantaged."
Benn stressed he "shared the disappointment of the UK dairy sector at the competitive distortions resulting from the deal".
The agreement also had the potential to increase milk price volatility and distort the dairy market as volumes across Europe increased, according to the Royal Association of British Dairy Farmers.
In the run-up to the abolition of milk quotas in 2015, EU states will be allowed to raise their quotas by 1% per year from next April. Italy has been granted its full 5% increase from 2009 to give it an outlet for its vast dairy production.
Crucially, countries such as Ireland have also won an extra 1% quota increase per year on the back of an adjusted butterfat co-efficient that effectively allows them to boost production.
In Ireland's case, that would equate to an increase of 500 million litres of milk in the next five years, worth over £100m in extra sales.
With UK milk production falling and the country's dairy farmers not expected to fill their quota, there are fears Irish and other EU producers will increase exports of cheese and other dairy products to the UK, driving prices down.
"I deplore the back-door deal which could allow Ireland to get a higher milk quota increase," said NFU president Peter Kendall. "If this leads to extra production it will impact on our market. I expect [Defra secretary] Hilary Benn to fight to ensure British farmers are not disadvantaged."
Benn stressed he "shared the disappointment of the UK dairy sector at the competitive distortions resulting from the deal".
The agreement also had the potential to increase milk price volatility and distort the dairy market as volumes across Europe increased, according to the Royal Association of British Dairy Farmers.
No comments yet