Milk quota

In 1984 the then European Economic Community (EEC) introduced a quota system in order to limit milk production in the member states. Basis for the allocation of the reference quantity for milk , also milk quota or milk quota called, was the milk delivery quantity of the milk business year 1983 (1 April 1983 to 31 March 1984).

As part of the guaranteed quantity scheme , each Member State was assigned a fixed production quota for milk. In Germany, this quota was distributed among the individual milk-producing businesses. Other Member States such as B. France administered the quotas as dairy quotas .

If a milk producer delivered more milk than it had quotas at its disposal, it was sanctioned by paying a so-called super levy . This was set so high that the milk production economically un profitable should be. In practice, the levy was often lower than the lease prices paid for milk quotas, since since the mid-1990s the milk delivered was netted first at dairy level and then nationwide before the levy was paid. Thus, in some years there was no charge at all because the quota was not met nationwide.

The regulations continued to apply after the EEC was slowly converted into the European Union (EU) from 1993 . The guaranteed quantity regulation expired on April 1, 2015 and milk producers can produce and deliver milk regardless of a quota. There is hope that this will make the member states more competitive on the world market.

Reasons for the introduction

As early as the end of the 1970s, increasing milk production in the EEC led to ever larger surpluses (“ milk lakes ”, “ butter mountains ”), which could only be taken off the market at great expense. In order to regulate the milk market, the market policy instrument of allocating the supply volume was chosen. The aim was to maintain a stable price for milk products through a limited supply, and the EEC expenditure on this agricultural market regime was also to be limited.

Problems

The allocated quota was around 10–20% above consumption , so that this part of production was largely subsidized (as animal feed , for industrial use or as export to third countries). This statement was put into perspective in the 2007 milk year, when for the first time less milk was available on the European market than was in demand, which led to milk prices of 50–100% above the previous year's price. Furthermore, the market regulation for milk has since been suspended, so that since then no more dairy products have been subsidized.

As a result, the stable prices could not be enforced in the hoped-for form. The political signals regarding overproduction are contradictory: On the one hand there were buy-out campaigns, quota cuts, the fat quota and super levies, on the other hand there were also quota increases and expanded balancing options . In 1995 the WTO's Uruguay Round agreements led to partial market liberalization . With the failure of the Cancun negotiations (2003), there were no further liberalization steps.

The available quotas have been exceeded almost every year since the introduction of the guaranteed quantity regulation. Italy in particular was initially responsible for this despite quota increases. Since 2003, Germany has been largely responsible for exceeding the quotas. At the beginning of the 1990s, Germany was practically tax-free due to the restructuring problems in the new federal states and the quota balancing at federal level. After that, the East German companies caught up and reduced the netting scope, so that since 1996/97 it has been handed over almost annually. France and England, on the other hand, no longer used their quotas. Spain and especially Greece could not deliver the additional quotas granted to them either. In 2003/04, a super levy of € 388 million was due in the EU-15. In 2006 the total amount of milk produced in the EU was 774,000 tonnes above the milk quota, for which super levies of 221 million euros had to be paid. The largest part of the super levy was attributable to Italy with EUR 176.3 million and Austria with EUR 24.7 million.

The milk quota represented a cost factor for the farms. When the milk yield was increased or the number of cows increased, the milk quota had to be bought in order to be able to sell the additional amount of milk. The quota prices in individual regions were at times over € 1 / kg. This capital had to be invested, i. H. the operation incurred costs through depreciation and interest expenses. Thus, the profitability of dairy farming decreased the higher the quota costs were.

The milk quota had actually become “property” of the farms. When the dairy farm was abandoned, it was resold, and until 2000 it could also be leased or leased. This gave rise to the term “ Sofamelker ”.

Milk exchange

Since 2000, the milk quota could only be transmitted or traded in Germany via milk quota sales outlets, so-called “quota exchanges” or “ milk exchanges ”, and within certain regions (transmission areas). On certain dates (three times a year), sellers could offer milk quotas at a price chosen by them. Producers who wanted to acquire milk quotas made an offer on the exchange that was defined according to price and quantity. On this basis, the equilibrium price was determined and the corresponding quota quantities distributed. Supply and demand that were outside a price range around the equilibrium price were not taken into account and could not be sold.

Until June 30, 2007 there were 21 transmission areas in Germany:

6 for the federal states
- Hesse
- Mecklenburg-Western Pomerania
- North Rhine-Westphalia
- Saxony
- Saxony-Anhalt
- Thuringia
4 common for the federal states
- Berlin and Brandenburg
- Lower Saxony and Bremen
- Rhineland-Palatinate and Saarland
- Schleswig-Holstein and Hamburg
4 in Baden-Württemberg (corresponding to the government districts)
- Stuttgart
- Karlsruhe
- Tübingen
- Freiburg;
7 in Bavaria (according to the administrative districts)
- Upper Bavaria
- Lower Bavaria
- Swabia
- Upper Palatinate
- Lower Franconia
- Middle Franconia
- Upper Franconia.

From July 1st 2007, all previous transmission areas were merged into two: all old federal states will form the transmission area west , the new federal states the transmission area east . A common equilibrium price was calculated for the traded quota quantities within each of the two transmission areas. The last trading date on July 1, 2009 resulted in a quota price of € 0.15 / kg in the west transmission area and € 0.08 / kg in the east transmission area.

Within the family, the milk quotas could be transferred outside the milk exchange in the event of the farm being handed over or in the case of cooperation under certain conditions.

End of the quota system

As part of the current reform of the EU agricultural policy , three measures have been adopted with regard to the milk quota:

The milk quota regulation was extended until 2014/15. It was abolished on April 1, 2015.
The quotas were increased in three steps from 2006 to 2008 by a total of 1.5%.
Additional quotas were set for Greece (120,000 t) and the Azores (73,000 t).

In addition, it was decided to lower the intervention prices for butter and skimmed milk powder , the gradual lowering of the intervention thresholds for butter, the abolition of the target price for milk and a 60% compensation for loss of income through a milk premium.

In November 2008, the EU agriculture ministers agreed to increase the milk quotas between 2009 and 2013 by one percent a year. In 2010 and 2012, reviews were planned as to whether the market situation would allow a further increase.

Accounting

If milk quotas were acquired against payment (this means that the allocated milk reference quantities from 1984 were not capitalized), there was an obligation to account for them as an intangible asset . The abolition of the milk quota as of March 31, 2015 meant that the milk quotas had to be amortized as planned by 2015 .

literature

Felsmann: Income taxation in farmers and foresters , 3rd edition / 28. Supplement September 2000.
Agriculture / Economics , 12th edition, BLV Verlagsgesellschaft mbH, Munich 2005, ISBN 3-405-16439-7 .
Agriculture / Markets and Marketing , BLV Verlagsgesellschaft mbH, Munich 2003, ISBN 3-405-16440-0 .