MSU Agricultural, Food, and Resource Economics
The subsidizing and public storage program for dairy products (milk powder and butter) led to surplus production. The cost of such a policy became unacceptable for Community Members.
In 1984, the Minister of Agriculture Council decided to implement a quota program on milk production coupled with strong cessation schemes in order to reduce milk production and improve efficiency of dairy farms.
This program led to a 25% reduction in number of dairy farms, a 8% reduction in milk production and improved average productivity of dairy cows.
The cost of the dairy policy decreased 20%, including cost for supply and demand management of the dairy sector.
Public intervention on the dairy market became unnecessary and revenue of dairy prodUcers improved. Social goals, placed at a high priority level have been fulfilled.