EU dairy farmers protest end of milk quotas

AP Photo/Virginia Mayo Dairy farmers stand by their tractors in front of a bonfire during a demonstration against the lifting of milk quotas in front of the European Parliament in Brussels on Tuesday, March 31. Dairy farmers hit the streets of Brussels to protest against the lifting European Union milk quotas amid concern the move will flood the market with surplus milk.

BRUSSELS (AP) — Yvan Deknudt’s dairy farm has been leaking money and he believes that things are set to get worse imminently. That’s why he drove his tractor right into the big city on Tuesday, parked it outside the headquarters of the European Union and set fire to the flags of some of Europe’s biggest food companies.

On Wednesday, the 28-country EU will finally bring the curtain down on one of its most contentious farm policies — milk quotas will be no more.

For Deknudt, the fear is that the move will lead to an oversaturated market and send prices plummeting — potentially good for consumers, not necessarily for him.

“With quotas being lifted, we’re really scared that production is going to explode and we won’t be able to pay our costs anymore,” said the Belgian farmer after his 30-kilometer (19-mile) drive to Brussels to join a rally with a group of die-hard milk farmers from 16 countries.

Quotas were introduced more than 30 years ago to keep a lid on production as out-of-control EU subsidies contributed to the formation of the metaphorical milk lakes and butter mountains, with excess produce stored away at huge cost or dumped on world markets with export subsidies.

The system is ending at a time when a soaring global population should lead to higher demand, thereby allowing European producers to compete with U.S. and Australian farmers targeting lucrative markets in Asia — countries like China and South Korea.

The move is hardly a surprise. It was announced in 2003, and quota levels have been slowly raised in recent years to get farmers used to producing more milk.

But for small farmers like Deknudt, that extra produce has already driven the wholesale price of milk down, some 30 percent lower now than the minimum he needs to break even.

The future of his farm in the rolling pastures around Braine-Le-Comte, where he has 80 head of Holstein, hangs by a thread.

“My son has given up on the idea of producing milk. We have a great farm. It’s a shame for it to go to waste,” the 54-year-old said. His boy plans to grow potatoes instead, he said.

Though the EU quotas were criticized, they did provide some price stability. The big fear for these small farmers is that they will now be priced out of the market by multinationals like Nestle, Danone and Campina.

“It serves no purpose to raise production and dump milk on other countries, as is the case in Africa today, which is destroying smaller producers both in Africa and in Europe,” said European Milk Board spokesman Erwin Schoepges.

In what they see as a power-grab by the big conglomerates, Deknudt and his colleagues booed and blew horns as they set fire to the company flags. Black smoke wafted high into the air in front of the EU parliament building.

The EU has played down concerns about a slump in prices. Its executive Commission has created an observatory to monitor prices and production trends, a sort of early warning system for farmers.

Some EU payments and investment support are also available for those in trouble, but nothing like the generous subsidies of the past.

“We don’t want bonuses, we don’t want subsidies. We just want to be paid for our work, to pay for our farm,” said Schoepges.

Meanwhile big companies in Ireland, Germany, Denmark and the Netherlands stand ready to step up production.

As the quota system entered its final day, the EU’s top farm official, Phil Hogan, welcomed the move in terms Deknudt might not want to hear, saying that it “represents the opening of a new chapter — a new era without production constraints.”

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