The case for eliminating the milk quota and reforming the EU Common Agricultural Policy

Our evidence provided key support for the UK Government’s pressure on the EU for the elimination of milk quotas that led ultimately to the 2008 decision to abolish milk quotas in 2015 within the EU.

Milk production plant
These findings demonstrated that the quota system was placing severe restrictions on the development of the dairy industry within the UK.

Our research highlighted how removal of the milk quota system in Europe could generate economic gains and improve efficiency in the dairy sector. The evidence informed the 2008 decision by the EU not to renew quotas beyond 2015.

The EU milk quota regime was introduced in 1984 to restrict milk production levels and control the high costs of managing surpluses of dairy products.

Our research demonstrated that the quotas restricted dairy farmers from innovating, adapting and expanding to meet new demands, hence undermining the sector’s competitiveness.

A seminal report based on this Manchester-led research influenced the EU’s decision in 2008 to extend milk quotas only up to 2015. The EU also followed research-backed recommendations on the best strategy for gradually phasing out quotas to avoid rapid and disruptive price adjustments. The EU decided to increase national quotas by 1% per annum to slowly erode their value and thereby achieve a 'soft landing' for when the quotas expire completely in 2015.

Prof Colman’s collaborative research on the wider environmental effects of milk quotas has been cited heavily by the European Commission’s Joint Research Centre in its analysis of how quota elimination could affect land use and the environment in the EU.

The research and econometric analyses of Prof Colman continues to influence on-going policy reports as the dairy sector prepares for the end of the quota system and the European Commission and the European Parliament continue to discuss and consult with stakeholders on appropriate forms of supply management.

Key quote

“Prof David Colman … demonstrated clear economic arguments for both the elimination of milk quota and the gradual expansion of quota from 2008 to 2015 to ensure a smooth landing.”

Our research

An analysis of the quota regime on UK dairy farmers provided the first estimates of the high costs that more efficient producers had to pay to lease or buy additional quotas, equivalent to 12.5% of total sales revenue in the 1990’s (the time of the study).

These findings demonstrated that the quota system was placing severe restrictions on the development of the dairy industry within the UK, providing strong evidence for the benefits of abolishing milk quotas.

A study in 2002 on the potential costs and benefits of phasing out the EU quota system concluded that the total annual benefit to the EU would be EUR 2.27 billion.

Key people

  • Prof David Colman OBE
  • Prof Dan Rigby
  • Dr Michael Burton
  • Dr Jeremy Franks

Further Information