Articles
An Economic Analysis on the Milk Quota System in EU: The case study of the dairy sector in the United Kingdom
2015 Volume 2015 Issue 35 Pages 274-298
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2015 Volume 2015 Issue 35 Pages 274-298
The purpose of this paper is to analyze the present condition of the Milk Quota System (Additional Levy System) in EU and consider its policy effect on the dairy farm structure, by taking the case of the dairy sector in the United Kingdom (particularly England and Wales). The Milk Quota System was introduced as the policy dealing with surplus raw milk in 1984, and its aim is to attempt to achieve the market equilibrium of supply and demand of raw milk by using the way of the control of the overproduction. The Milk Quota System is going to be abolished on March 31, 2015, because EU is willing to promote the market-oriented dairy policy.
In England and Wales, the trading quota market (buying system and leasing system) was effectively worked, where permanent transfer or temporary transfer of allotted quota to each dairy farm were traded across the regions. Dairy farmers who have the will to boost milk production buy or lease additional quota from farmers outgoing from the dairy sector or downsizing production. Because the both of buying system and leasing system of quota had an effect on the dairy sector, on the one hand numbers of dairy farm have been declined, on the other hand farm size based on milk cow numbers have been expanded and milk yield per cow grown more remarkably by selective breeding. In short the structural improvement of the dairy sector have made progress to a high degree and so they have developed their productivity and competitive power.
After the abolishment of the Milk Quota System EU dairy sector will take a more active entrance into the world market of milk products as market strategy against a background for the trend of trade liberalization. When the dairy sector consisted of a lot of technically efficient dairy farms in England and Wales choose their future course, they will have access to the world market to promote the sector, too. In conclusion the dairy sector in England and Wales will be able to obtain the fruits of its sustainable development in future.
