Agriculture, Estonia, EU – Baltic States, Financial Services, Legislation, Markets and Companies

On April 1, the EU milk quotas that have been in force for decades will disappear. While since 2004, Estonian dairy producers have been in the limits of the allowed production volumes, in the last quota year, Estonian farmers are likely to face a fine, which the European Commission allows to pay within three years.

Due to the Russian trade restrictions, the fine for exceeding the quota will be lower than originally forecast, said Agriculture Minister Ivari Padar.

"If there was no crisis period in 2014, there certainly would have been a much bigger quota breaking. In this case, we would have anticipated 12-13 million euros of quota fine for milk exceeding the quota. Today, we can talk about the magnitude of 3 million, but the final amount we do not have yet," he explained.

In connection with the disappearance of the quota system, European milk producers have invested in order to be ready for competition when the market opens. "Over the next ten years, we plan to be the planet's fastest growing producers of milk. From now until the year 2020, we will increase the volume of milk production in Ireland by 50%," said, for example, the Irish Minister for Agriculture Simon Coveney.

Ivari Padar is not that optimistic about the future of the Estonian dairy industry. "I would like to hope that in the second half of the year, we in Estonia would be able to pay such a price for milk, which would cover the costs. But the year 2015 makes one cautious in every way, because even people who are much smarter than me, cannot tell what happens when the market opens," he said.