Waldemar Broś and Marcin Hydzik, leaders of Polish milk producers federations, discuss the current situation of national dairy industry and abolition of milk quotas in 2015. The abolition of milk quotas has been heavily criticized by farmers. However, milk quotas have many disadvantages. Apparently, less production is equivalent to higher prices. This means first that quotas do not create money for farmers from nothing but that consumers have to foot the bill. Second, higher prices on the EU market reduce EU exports of dairy products below the level its global comparative advantage would suggest. Artificially reduced milk production leads, for instance, to a loss to European cheese exporters. Third, higher prices on the EU market trigger additional imports. Some of the extra money paid by consumers thus goes to foreign suppliers.
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