EU milk quotas sour farmers' hopes

Farmer Krzysztof Banach has won a string of awards for the milk from his 100-strong dairy herd, and he is keen to boost output from his farm in northeastern Poland. But, like many fellow farmers, he frets that the output quotas Poland must adopt when it joins the European Union will shatter his dreams of expanding his farm and turn his country into a net importer of farm produce. Poland, the sixth-largest milk producer in Europe, wants to produce 10.8 billion liters a year, but Brussels is seeking to curb output below 9 billion liters under a quota system designed to prevent the creation of a surplus milk "lake." "The milk quota the EU has proposed is unacceptable," said Banach, who last year sold 650,000 liters of premium-quality milk. "It would leave us with no chance to grow. "Demand for dairy products will soon rebound and many small farms have already taken large loans to modernize and boost production. For 20% of dairy farms in our region, the EU proposal would mean bankruptcy." Quotas, along with food safety, will dominate accession talks on farming until November, when the EU's 15 governments are due to agree a common position on another thorny issue - farm aid. Poland, with some of the nine other mainly Eastern European candidates wanting to join the EU, hopes to convince Brussels to soften its stance. EU diplomats have played down hopes of big concessions.

Farming experts forecast that the annual consumption of dairy products in Poland, a country of 38 million, will rise by more than 15% over the next decade from 240 liters per person now, driven by economic growth and rising incomes. Total milk output in Poland inched up 0.7% to 11.5 billion liters last year, with the amount supplied to dairies jumping 6.7% year-on-year to 6.8 billion liters. "Poland has better conditions for milk production than many EU members, and its milk quality is constantly improving," said Zofia Krzyżanowska of the Foundation of Assistance Programs for Agriculture in Warsaw. Two-thirds of milk processed by Poland's 400 dairies already fulfills tough EU hygiene standards, qualifying for the so-called "extra" class. One of those is the OSM Piatnica dairy, near Lomża in the northeast. But chief executive officer Zbigniew Kalinowski said the license to export to the EU won two years ago will be worthless if restrictive quotas are imposed on Poland. "If quotas are too low, farmers will not be able to meet demand," he said. "It would spark serious tension if we had to import what we can produce here." In 2001, Poland doubled its export surplus of dairy products to $322.6 million. The EU has taken a tough line as concerns grow that the bloc's farm aid budget might balloon to unmanageable levels after admitting poorer countries to the rich Western bloc. - Reuters