THE future of more than a million dairy farmers will be at the heart of three days of talks between European Union farm ministers, beginning in the southern Dutch town of Middelburg tomorrow.

The Dutch, as one of the world's leading exporters of cheese and other dairy products, want to revamp the way the EU controls its milk production, to be able to compete on expanding world markets.

The Dutch want to review the system of national production quotas and subsidised prices in preparation for the next round of World Trade Organisation (WTO) negotiations, due to start in 1999, and the EU's expansion eastwards.

But there is strong resistance from most of the EU's main dairy producers, Ireland included, to abolishing quotas, as this would result in a flood of milk and a collapse in prices, driving thousands of smaller farmers out of business.

Agriculture Commissioner, Mr Franz Fischler, will present an analysis of EU dairy market prospects, showing that its declining 45 per cent share of the world market is likely to fall further as high prices make it uncompetitive.

Although the report makes no proposals, it signals that prices will have to be cut if the EU is to continue to export its annual surplus of around nine million tonnes of milk.

Mr Fischler, while suggesting that quotas could become more flexible, has defended the system, saying it has curbed surpluses and allowed farmers to survive in mountain and other poor regions.

Italy, where milk producers earlier this year brought large parts of the country to a standstill, and Britain, are pressing for increased quotas to satisfy national needs but this is likely to be strongly resisted.