A new Zombie has entered the European Union. Those who believed that the milk quota has been dead for a year and a half now must face the fact that regulations that have cut so strongly into the economy of a sector for so many years have a tendency to stick. Somehow, someone must have convinced the EU Commission that the European dairy industry cannot be subjected to the forces of the markets but rather needs state administration. That is why the EU, all of a sudden has established a scheme where farmers may earn money when not delivering their milk to a dairy.

Admittedly, the amount of money – 150 million Euros – is not really sufficient to really tackle the substantial growth of milk supply that has happened for the past years, and still is happenin g in some places in Europe even now. Given that some 150 million tons of milk that the bloc produces per year, 150 million Euros would mean one Euro per ton or 0.1 Cent of not supplied milk as compensation for a farmer. Who would do that and feel happy not delivering? Probability says that only a handful of farmers will make use of the compensation, mostry those who have planned to get out of the business anyway.

But economic reality and political action are very often in collision. Brussels can claim they have done everything they could to help crisis stricken dairy farmers. And the axis of France, Poland and Germany that is now to dictate over the EU after the Brexit has had its first triumph. The French have never been in favour of a market environment, the Polish, the EU’s biggest net gainers, take anything they can get and the German government is preparing for a coalition with the Green party after 2017 elections. It is exactly the Greens who are close to farmer groups like European Milk Board, who long since demand a return to the milk quota; Chancellor Merkel has given her new political allies a gift with forcing Commissioner Hoganinto the EU-wide scheme to incentivise a reduction in milk production. The CAP will see much more of such nonsense in future should Merkel’s plan work.