DAIRY farmers in West and North Yorkshire - nearly 600 of them altogether - will be wondering what the latest decision by the European Union is likely to mean for their future in the production of milk and other dairy products.

On April 1 the EU scrapped milk quotas for dairy farmers throughout the 28 member states, bringing to an end 30 years of trying to curb over-production and the creation of milk lakes and butter mountains that became controversial public issues in the late 1970s.

By freeing up milk production once again isn't the EU only creating the same situation that it tried to prevent in 1984?

Tenant dairy farmer Tom Rawson, 36, works a 425-acre farm on the Savile Estate, Dewsbury. Last year his herd produced 1.7m litres of milk. Nationally the UK's 10,000 or so dairy farmers produced about 15.3 billion litres - under the EU quota.

Mr Rawson said: "The EU took the decision to end quotas a couple of years ago when the market for powdered milk exports to China was enormous. That's changed. Milk prices have plunged in the last eight months and there are three reasons for that.

"They are Russia's ban on EU imports; China's decision to import less milk powder and a ten per cent rise in milk production globally due to good conditions for dairy farmers. That's why we have seen a third of our milk price taken away from us.

"Last spring we were receiving 35p a litre. Now we are down to about 26p. The industry needs 32p on average, from tenant farmers to owners. Some people out there are getting 16p or 17 a litre. There is a huge disparity between top and bottom.

"The retention of quotas would have been good for West Yorkshire dairy farmers. The UK and France lobbied against removing them, but Germany, Holland and France went the other way. The Irish boys have been preparing for this for the last two years, selling off surplus stock to England and Scotland.

"If they cannot process their milk as milk power what are they going to do? Put it on a ferry at Hollyhead and send it here. Abolition of quotas has done us no favours at all."

Long term that may change. With up to a billion more people on the planet and less land available for farming, those still in the business 20 years from now are likely to benefit. In the interim the number of UK dairy farmers is likely to halve to about 5,000, Mr Rawson added.

Rachel Gillbanks, National Farmers' Union spokesman in York confirmed that things have changed for the worse since last spring.

She said: "People have lost money hand over fist. The milk production industry generally has been suffering from intense volatility. We haven't been up to our quota level since 2003/04, so maybe smaller family businesses aren't thinking about the consequences of scrapping quotas - not yet anyway."

The day that quotas ended, NFU dairy board chairman Rob Harrison issued a statement urging all countries to act responsibly and collectively in order to manage future volatility.

He said: "Milk quotas were introduced in 1984 to address the structural oversupply on the EU market of the late 1970s and early 1980s that had led to the infamous milk lakes and butter mountains.

“Farmers and dairy processors here do have some concerns about how other EU countries will react to the ending of quotas. Some are rapidly increasing their output without an end market for these goods.

"With milk prices yet to show any strong signs of recovery, this could push farm-gate milk prices down further in the EU, and stall any recovery in the dairy markets. It’s vital that expansion in any member state is planned in accordance with available market opportunities."

The NFU officially takes the optimistic view that the end of quotas won't be the end of the dairy industry in the UK, stating that the risk of over-production is mitigated by the increased focus on added value products such as cheese and yoghurts, ingredients for nutritional, sports and dietary products.

An example might be Dale Dairies, Town End Farm, Grassington. Its website shows that the family-owned enterprise, which started in 1938, has survived all the vicissitudes and price fluctuations of the last 77 years and sells its various kinds of milk, juices, butter, cream, eggs and water to a variety of local milkmen, public sector organisations, wholesalers, shops and schools.

Tom Rawson said about his farm: "All I can do is focus on my own costs. I know in 20 years' time what the population is going to be and that we'll have a shrinking land base, so we know how we are going to produce more from less."