In March 2013, a plenary session of the European Parliament agreed on a mandate for negotiations on amendments to the CAP. Among its decisions, the European Parliament voted to support the introduction of a milk supply management system in times of crisis. If implemented, the system would require suppliers who increased their production to pay a penalty, while aid would be paid to those who had cut production.
This position will be used as a basis for negotiations with the European Council and the European Commission (EC) to determine the final outcome of the CAP reform.
Commenting on the discussions, Dairy UK director general, Jim Begg, called on policymakers in Brussels to demonstrate “confidence in the ability of the industry to be competitive in the world markets.”
"The EU should build policy for the dairy sector around confidence in the ability of the industry to be competitive in the world market,” said Begg.
“Nobody doubts the enormous opportunities for growth that the European dairy industry is being presented with. This will provide a strong foundation for the future.”
According to Begg, the implementation of a milk supply management system in times of crisis would be “self-defeating” in the post-milk quota era.
“In a world of growth opportunities, seeking to address price volatility by reducing productive capacity is self-defeating. It is also unworkable in the current budget context. The European dairy market is now an extension of the world market. Supply management could only work if Europe sheltered the industry behind a raft of subsidies. The budget is no longer there for that.”
“Policymakers should work with the industry to find the right balance between private and public sector instruments to address volatility. Together I’m sure a solution can be found without reverting to the methods of yesterday," Begg added.