Cheaper milk to flood Sweden

Swedish dairy farmers worry that the milk market will get even tougher once the EU milk quotas are lifted next week and that their high production costs will put them at a disadvantage, Swedish Radio News reports.

Once the milk quotas are lifted on April 1st by the EU Commission, dairy farmers in the union will be allowed to produce as much milk and other dairy products as they want for the first time since in the mid-1980's.

People working in the dairy sector in Ireland are celebrating the end of the milk quota regime, but in Sweden - where both production costs and taxes are higher - dairy farmers are worried their products will look less appealing once the prices start to drop.

"We have roughly 16 percent higher costs than an average dairy farmer in Ireland. That's fine as long as the consumer is willing to pay for it, but today dairy products are flooding in from abroad, where 140,000 cows stand ready to meet an increased demand," says Stefan Gård, chair of the trade organisation Swedish Dairy Farmers.

When the system with milk quotas was introduced, the production of milk products in the EU far outstripped the demand, and the quotas were introduced as a way to close this gap.

In recent years the demand has picked up, and the quotas are to be abolished in order for the industry to grow, according to the EU Commission.