End of milk quotas means opportunities in Asia: EU

European dairy farmers will be better poised to benefit from world demand for their products, particularly in Asia, following the scrapping of three-decade old milk quotas, the EU agriculture commissioner said.

But Phil Hogan also told a press conference he will remain vigilant in case of a threat to Europe's milk producers as he acknowledged the risk of price volatility.

The quotas which ended on March 31, were introduced in 1984 to prevent over-production when farmers dumped surplus products, encouraged by high prices.

Irrespective of demand, EU dairy farmers have been guaranteed a price for their milk that has been much higher than on world markets, though this has been reduced in recent years.

According to Hogan, a market-based approach will bring new opportunities to dairy farmers throughout the 28 member states.

"We're going to take advantage of the opportunities that the abolition of milk quotas gives towards enhancing the potential of value-added processing which will create a lot of jobs and growth in rural areas," Hogan said.

The EU would now have new market opportunities, particularly in the Far East, he added.

He said Europe failed to seize these opportunities in the last 30 years while other countries like New Zealand did.

On the issue of tackling price volatility, he said the EU is exploring through financial instruments and in policy with member states by integrating supply-chain contracts, fixed contracts, and forward contracts.