Brussels, Jan. 11 - Europe's farm chief hinted on Friday at a series of changes to the EU's dairy sector ahead of the probable phase-out of traditional support tools such as export subsidies, production quotas and publicly funded storage.
In November, European Union Agriculture Commissioner Mariann Fischer Boel set the ball rolling for major reform of EU farm policy, taking aim at large holdings and asking whether "old-style" support schemes still had any relevance.
Dairy is one sector that has long been in her sights.
Created in the mid-1980s to deal with the EU's notorious milk surpluses, the national production quota system is due to be abolished in 2014/15 as part of a mammoth 2003 reform of the Common Agricultural Policy, or CAP.
Germany and France are the EU's biggest milk producers, churning out 27.6 million tonnes and 25.3 million tonnes respectively in 2005, according to the United Nations Food and Agriculture Organization.
Milk accounts for nearly 20 percent of the total value of EU farm output.
The planned abolition of milk quotas has already prompted Fischer Boel to propose a "preparatory" quota rise in 2008, also to respond to soaring prices, particularly for butter and skimmed milk powder.
Speaking to a dairy seminar on Friday, Fischer Boel went a little further in her comments than in the broad policy paper she published in November -- which mainly outlines a reform philosophy but also contains some concrete ideas for change.
On export subsidies, for example, the sector should assume that they would end in 2013, whatever the outcome of the current World Trade Organisation talks known as the Doha Round.
"As you know, we have conditionally agreed within the Doha round of WTO talks to phase these (subsidies) out by the end of 2013. But whatever happens in the Doha round, I think we should assume that the days of export refunds are numbered," she said.
"This doesn't mean that we should abolish them tomorrow. For the time being, we should keep the right to start paying refunds again if need be. But they should not be part of our long-term vision," Fischer Boel said.
She also suggested cutting safety-net support prices -- the so-called public intervention storage system -- for butter and strictly limiting existing EU schemes for subsidising farmers to retain butter and cheese in private storage.
Private storage was recently scrapped for skimmed milk powder but a compulsory scheme remains for butter and cheese, which Fischer Boel suggested should no longer be automatic.
"Should we still automatically offer support for private storage every year? Or could we give ourselves the freedom to make a decision each year on the basis of the market situation?," she asked the seminar's delegates.
And for milk quotas, there were various options being considered for providing the EU dairy sector with a "soft landing" ahead of the 2015 expiry date, she said.
Fischer Boel, not a fan of traditional market management tools such as production quotas, intervention buying and export subsidies, has often signalled that transitional measures might be needed to help the EU dairy system adapt before 2014/15.
While the "soft landing" should be achieved mostly by gradual quota rises in the run-up to 2015, there were other possibilities that might help, she said.
That might include scrapping annual fines levied on EU governments for exceeding quotas and some kind of EU-wide system to balance unused quota and quota overshoots, she suggested.