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THE ending of milk quotas is the right move for the dairy industry, but important decisions need to be made about what will happen once they have gone, the NFU told a major European conference on the subject.

Farming and dairy organisations from across the EU will meet to discuss the future of the milk quota regime in Brussels and NFU dairy board chairman Gwyn Jones said there were questions about what would happen once the system ends that needed to be answered.

Mr Jones said: "2008 is an important year as far as milk quotas are concerned. The regime has been with us since 1984, but it is now past its sell-by date and will come to an end in 2015. We believe that it is right that quotas should go then.

"Nevertheless, there are some very important debates to be had about how the ending of the regime is brought about and what happens once quotas are gone. A soft landing' is essential. In our view this is probably best brought about by gradually phased increases in milk quotas up to 2015."

Some EU countries have expressed serious concerns about the effect the ending of milk quotas might have on dairy incomes, especially for farmers in less favoured areas, Mr Jones said.

"There are strong moral and socio-economic arguments for supporting dairy farmers in the less favoured milk producing areas of the EU, such as the Alps or parts of Scandinavia. Consequently, consideration needs to be given to what mechanisms are best suited to sustaining production. However, it is essential that any support does not create unfair advantages to these areas and is delivered for genuine reasons.

"Finally, little has been said so far about how the dairy industry will operate once quotas are gone. While this will mean production decisions will be based entirely on the market, I am concerned that, unless checked, the loss of farmer quotas could hand more power to milk buyers in a dairy supply chain that is already unbalanced. For this reason, I will be using the conference to urge the European Commission to look closely at our work on dairy contracts to see how the interests of dairy farmers might be protected once quotas go."

12:10pm Tuesday 12th February 2008

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