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Time to get rid of EU dairy quotas?

Lookup NU author(s): Emeritus Professor David Harvey

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Abstract

Although the latest CAP reform extends dairy quotas to 2014-15, they are likely to remain subject to question. Some member states (the Capri group), supported by Europe's trading partners, will continue to press for elimination of dairy quotas. The members of the Capri group have commissioned research to examine the consequences of quota elimination, and by implication the elimination of dairy market support measures. Economic analysis of the consequences of quota and market support elimination strongly suggests that the European dairy industry would be able to compete effectively, with at least present levels of output, without the support and protection of the current policy. European society as a whole would be better off without this policy. Eliminating the present policy, however, would result in substantial losses to the owners of quota. Elimination of the present policy without some compensation for these losses is unrealistic. But there are ways of providing compensation, to leave everyone better off ultimately, by an estimated ∉12 billion per year when compensation ceases. This is a very substantial gain to the EU. Nevertheless, stability of world dairy markets would remain a considerable deterrent to such a policy reform unless other countries also eliminate their own protectionist policies. Is either the EU or the rest of the world ready to accept this challenge?.

Publication metadata

Author(s): Harvey DR, Colman D

Publication type: Article

Publication status: Published

Journal: EuroChoices

Year: 2003

Volume: 2

Issue: 2

Pages: 12-17

ISSN (print): 1478-0917

ISSN (electronic): 1746-692X

Publisher: Wiley-Blackwell

URL: http://dx.doi.org/10.1111/j.1746-692X.2003.tb00046.x

DOI: 10.1111/j.1746-692X.2003.tb00046.x

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