Cows don't just magically disappear when there's less demand. They need to regulate the farmers cattle breeding rate, and place hefty fines on them for exceeding that rate.

A measly €100 per cow per year ain't gonna do all that much, they can pay that off with just a few days worth of milk from the cow.

And then still turn around and jack the price of milk up beyond the rate of their losses, and the farmers might likely end up profiting even more, despite the tax.