The EU has agreed to raise milk quotas by two-percent in April to help mitigate the rising cost of milk prices.
Milk quotas were introduced across most of the bloc in the 1980s because of the so-called milk-lakes which developed when farmers were producing more than Europe could consume or export.nNow the European Commission estimates that between 2007 and 2014, there will be added demand of 8m tonnes of dairy products in EU member states alone, particularly for cheese.
Dairy producers are also keen to tap emerging markets and the Polish and Dutch governments are in favour of a bigger increase in quotas. BBC Brussels correspondent Dominic Hughes says part of the growing demand has come from India and China as a result of rising living standards and changing eating habits.
The EU hopes to abolish the quota system altogether in 2015 but is keen to adopt a “soft landing” approach so as not to harm sensitive areas of the industry. The commission says quota levels will be reviewed every year until they are abandoned.