Dairy policy in all Scandinavian countries except Denmark has long aimed at limiting milk production to. domestic demand plus an allowance for seasonal variation. Losses on production above this level have to be borne entirely by the milk producers themselves. This implies that the farmers should be interested in keeping. production in line with domestic demand and naturally also in increasing the domestic market. During the last five years the gap between supply and domestic demand has increased in most Scandinavian countries. Several attempts have been made to deal with the problem of excess supply. The policies taht have been tried in these countries and farmers' reactions offer interesting insights into similar U.S. policy issues.