Milk quota

In 1984, the then European Community (EC ) has introduced a quota system to limit milk production in the Member States. Basis called for the allocation of the reference quantity for milk and milk quota or quota milk was the milk delivery quantity of the milk year 1983 ( April 1, 1983 to March 31, 1984).

As part of the guaranteed quantities each Member State is assigned a fixed production quota for milk. In Germany, this rate was distributed to the individual dairy plants. Other Member States, such as France manage the quotas as dairy quotas.

Returns a milk producer more milk than he has quotas, he is sanctioned, through the payment of a so-called super levy. The super levy is set so high that the milk production is economically unprofitable.

The regulations were adopted with the establishment of the European Union ( EU) in 1993.

Reasons for introducing

In the late 1970s, the increasing milk production in the EC resulted in ever larger surpluses ( " milk lake ", " butter mountains " ) that could only be taken with the high expenses from the market. In order to regulate the dairy market, the market policy instrument of the quota of the bid amount was chosen. Due to a limited supply they wanted to get a stable price for milk products, also the EC expenditure on these agricultural markets should be limited.

Problems

The allocated rate was approximately 15-20 % higher than the consumption. Even today, it is about 10-15%, so this part of the production is sold largely subsidized ( as animal feed, industrial recovery or export to third countries ). This statement, however, relativized in the dairy industry in 2007, when less milk was available on the European market for the first time when it was in demand, which resulted in milk prices of 50-100 % above the previous year's price. Furthermore, has since been exposed to the market in milk, so that since then no more dairy products are subsidized.

Thus, the stable prices could not be enforced in the expected form. The political signals regarding the overproduction are contradictory: on the one hand, there were out buying actions, quota cuts, the fat ratio and super charges, on the other hand also increases in quotas and extended possibilities for balancing. In 1995, the agreements of the Uruguay Round of the WTO to a partial market liberalization. Further liberalization remained with the breakdown of negotiations in Cancun ( 2003).

The available quotas have been exceeded almost every year since the introduction of guaranteed quantities. For this purpose, responsible, despite increases in quotas in particular Italy. Since 2003 is responsible for exceeding quotas mainly Germany. In the early 1990s Germany was virtually free of duty by the restructuring problems in the new federal states and the Quotensaldierung at the federal level. After the East German firms were catching up and reduced the Saldierungsspielraum, so that handed down almost every year since 1996/97. France and England, however, not take advantage of their quotas. Even Spain and especially Greece, granted them additional shares can not deliver yet. 2003/ 04 € super levy were due in the EU -15 388 million. 2006, the total amount of milk produced in the EU stood at 774,000 tons above the milk quota, for which super charges in the amount of 221 ​​million euros had to be paid. The largest parts of the super levy accounted for 176.3 million euros to Italy and 24.7 million euros to Austria.

The milk quota is for farms a cost dar. For increase of milk yield or increase in Kuhzahl milk quota must be purchased in order to deduct the additional amount of milk can. The quota prices were in some regions at times when more than 1 € / kg. This capital must be invested, that is, for the operation costs due to depreciation and interest expense. This decreases the profitability of dairy farming, the higher the quota costs.

The milk quota has in fact become the "property" of the companies. When getting out of dairy farming it is resold to 2000, she was also hired out or leased. Thus, the term " couch milker " was born.

Milk market

Since 2000 is a transfer or an act of the milk quota in Germany only about milk -quota sales points, so-called "quota exchanges " or " milk Exchanges", and within certain regions ( transmission areas) possible. At certain times (3 times a year) can offer milk quotas at a price of their choice where sellers. Producers who wish to purchase milk quotas make in the stock market turn a defined price and quantity offer. On this basis, the equilibrium price is determined and distributed such quota quantities. Supply and demand, which lie outside a price range around the equilibrium price will not be considered and can not be sold.

To 30 June 2007 there were 21 transmission areas in Germany:

• 5 in the new federal states Mecklenburg -Western Pomerania
• Saxony
• Saxony-Anhalt
• Thuringia
• Berlin / Brandenburg;

• Hesse
• North Rhine -Westphalia
• Schleswig- Holstein, Hamburg
• Lower Saxony Bremen
• A common Rhineland- Palatinate and Saarland;

• Stuttgart
• Karlsruhe
• Tübingen
• Freiburg;

• Upper Bavaria
• Lower Bavaria
• Swabia
• Oberpfalz
• Lower Franconia
• Middle Franconia
• Upper Franconia.

As the exchange-traded futures July 1, 2007 all previous transmission areas were merged to now two: All the old federal states form the future transfer area west, the new federal states, the transfer area in the east. Within the two regions each transmission, a common equilibrium price of the traded share amounts are calculated in the future. The last exchange date on July 1, 2009 was a quote price of 0.15 € / kg in the transmission area in West and 0.08 € / kg in the transmission area in the east.

Within the family can be transmitted outside of the milk market in the case of farm transfer and cooperation between, under certain conditions, the milk quotas.

Border purchase price

The individual just economic for individual operation rate purchase price is called limit price. This depends on the benefits and costs of its dairy farming as well as the necessary investments in increase, possible interest charges and the cost approaches to the increased demand for labor. At the border purchase price, the additional cost of the additional purchase rate corresponding to the additional benefits from the milk sales.

Example: A dairy farm wants to build a new playpen for 70 cows. He expects a contribution margin per cow in the amount of 1,800 € (milk yield 7000 kg gross milk price € 0.32 / kg), with deduction of forage cost of 1,200 €. The workload should be 40 labor hours per cow, at 10 € hourly wage equivalent to € 400. Necessary for the 0.5 ha / cow areas for forage production fall in rent payments in the amount of 300 € / ha, ie € 150 / cow. He expects the building costs in the amount of 400 € / cow (depreciation, maintenance, insurance, and interest on investment cost per stall space of 4,500 € ). This € 250 / cow for the annual quota costs him would be left. These are at 7,000 kg of milk / cow € 0.035 / kg milk. With an assumed term of the rate in 2015 (8 years ) and 6 % interest rate, this corresponds to a possible purchase price for the quota in the amount of 0.22 € / kg.

This is the marginal purchase price, that is, the operation could buy the quota at that price - without making loss, but also without reaching a gain or a necessary risk protection.

Future

As part of the current reform of the EU agricultural policy three action had been decided on the milk quota:

In addition, the reduction of the intervention prices for butter and skimmed milk powder, the gradual reduction of intervention thresholds for butter, the abolition of the target price for milk as well as a 60% compensation for the loss of income by a dairy premium was decided.

The debate on the abolition of the milk quota 2014/15 has since been intensively. Arguments for the abolition include:

• High costs hinder growth rate willing holdings in the development.
• Despite milk quota is a market stabilization does not take place to the desired extent.
• The milk quota hinders free competition between milk producers.
• It prevents a stronger export orientation of the dairies.
• The Milchqoute causes a redistribution of capital from active to those leaving dairy producers.
• For consumers, the prices of dairy products fall

Against the abolition of the milk quota speaks:

• The milk quota only has therefore not led to price stabilization because it was enforced inconsistently.
• The quantity limit would have to be adapted to the consumption, the netting should be deleted and About milk are more sanctioned.
• With the abolition of the milk quota the total liberalization of the dairy market is to be expected and thus a drop in milk prices to world market levels. This level is so low that very many companies then can no longer do business to cover costs and would have to give up dairy farming.
• With the abolition of the quota asset milk quota (see accounting ) would be dissolved without replacement and the industry sector or owners received no compensation.

In November 2008, the EU Agriculture Ministers agreed to increase milk quotas between 2009 and 2013 by one percent per year. 2010 and 2012 are provided if the market situation allows a further increase checks.

Accounting

If milk quotas were acquired for valuable consideration (which means that the allocated milk reference quantities from 1984 may not be activated), there is an obligation for recognition as an intangible asset. Since this can not be worn, and no temporal usage limit is subject to the milk quota can not be amortized.

However, in a permanent impairment must be in accordance with § 253 paragraph 2 German Commercial Code ( HGB), an impairment loss is recognized to the lower fair value. This is currently the case, because the current market value as at 30 October 2006 was only 0.29 euros per kilogram.

The expected abolition of the milk quota by 31 December 2015 will cause the milk quotas must be amortized total of 2015.