EU to allow joint planning of milk production volumes

Published 20 April 16

The European Commission has published regulations allowing dairy organisations to make joint agreements to plan milk production levels, as part of the market support measures announced last month. Production planning will be allowed for 6 months, aiming to help manage supply levels over the EU’s peak this spring/summer.

Collaboration to plan milk production would usually breach competition laws but is being temporarily permitted due to exceptional market circumstances, under Article 222 of the CAP Market Regulation. This allows recognised producer organisations and interbranch organisations to agree to plan production. The Commission has passed an additional regulation extending this to dairy co-operatives and other forms of producer organisations, in order to maximise its coverage.

The impact on the dairy markets will depend on which member states make use of the measure and to what extent their country’s dairy organisations get involved. Given that the measure is voluntary, some organisations (or member states) might be cautious about pulling back production in case it gives away market share to those not participating in agreements.

That said, some EU co-ops have already started individually offering their farmers significant incentives to produce less milk – click here for more.