The effects of the recent decisions concerning quantitative restrictions for milk output are analyzed on the basis of supply and demand prospections. Setting up of milk quotas will bring about a fundamental change in the milk market regulation. If quotas are maintened for a long period, there will be negative consequences for dairy farms, dairy industry, farm structures and consumers. On account of the size of current dairy surplusses rapid improvement of the budget crisis is impossible. Therefore no price increase can be considered for the moment. After some time production quotas should be abolished with the precondition that present support prices be retained.
