EUROPE – The European Commission has released an options paper outlining possible proposals for the dairy sector under the common agricultural policy (CAP) mid term review.

The paper, which has been published for consultation, outlines four possible options. The first of these is to maintain the suggestions made in the Agenda 2000 reforms in Berlin. This would keep the EU’s current quota system in place until 2015. Some governments, including the UK’s, would oppose this because they want to phase out quotas as soon as possible.

The second option is to again use the Agenda 2000 approach and increase quotas by 3%, cut butter intervention prices by 15% and reduce support for skimmed milk powder. This would force liquid milk prices down even further than their current low.

A third option would be to use a two tier system whereby dairy products would be distributed freely on the world market and quotas for product processed for EU consumption would be cut by 5%. It is likely that the World Trade Organisation (WTO) would oppose this option.

The WTO is likely to favour the final option. This would be to abolish quotas in 2008 and then cut intervention by 25%, leaving a minimum support network in place.