Milk quota warnings for dairy farmers (From Western Telegraph)

Milk quota warnings for dairy farmers

Decisions relating to milk quota holdings should be made on economic grounds and not as a reaction to proposals mooted in the Common Agricultural Policy (CAP) reforms package, Pembrokeshire producers have been warned.

The proposals contained in the Mid-Term Review suggest that the year ending March 31st 2004 will determine individual quota allocations up to 2013.

But at an NFU meeting on Wednesday, hosted at Gelli Olau Farm, Bethesda, by Pembrokeshire milk producer Stephen James, farmers were advised against making hasty decisions.

Phil Hudson, the NFU's senior milk advisor, who spoke at the meeting with the chairman of the NFU's Milk Committee, Terrig Morgan, likened the situation to backing a racehorse.

Farmers acquiring quota on assumption may lose out, he suggested. Decisions should be based on the economics of milk production and not the compensation farmers may or may not be entitled to over the next ten years.

The uncertainty had created market distortions with cash-rich farmers purchasing quota.

Stephen James said this could hit young producers particularly hard. "Young people lease virtually all their quota in,'' he said. "They may find themselves at a disadvantage from cash-rich farmers holding onto quota for the sake of getting compensation payments.''

The CAP Mid-Term Review was also hindering the retirement plans of some farmers, the meeting was told, because it had yet to be decided if subsidies would be linked to the farmer or the land.

Although the proposals were meant to be finalised by next month, decisions relating to the complex dairy sector could take a lot longer, it was suggested.

Meanwhile, farmers were given hope that the milk price could rise after the next selling round in the autumn. A surplus in the cheese market was currently suppressing the price but these stocks should be clear by the autumn.