Sweden is on the verge of a dramatic restructuring of its dairy industry. A switch to the most free market dairy policy in Western Europe will lead to lower producer prices and as a result lower production. Many farmers will quit dairying but not necessarily quit farming. The decrease in cow numbers and the number of producers will be a continuation of past changes. Adjustments will be even greater for farmer owned dairy cooperatives. They face unprecedented changes in making a transition from being protected from competition to a situation where they compete openly (and possibly destroy each other) or to a situation where they cooperate with each other to reduce milk production, mitigate the speed of price deClines, and preserve a cooperative system to represent farmers in dairy policy as Sweden enters the' EC.