Speaking about small farmers, I have seen many times how they go bankrupt or end business on purpose, because they cant produce «EU standard» product, nor ready to sell their products for nothing, to have them imported and exported back with high price and labeled «EU standard». Example, local farmers sold milk for nothing, it has been imported to other country to a factory, where it has been sterilized, then it is exported back and become EU standard milk with a price of x3-x4 from origin.
You cannot export milk that hasn't been at least pasteurized from any country in the EU, so this scenario is simply fantasy, nobody is going to buy not-treated milk, ship it in a cold tank to a factory outside the country, treat it, and then resell back in the country.
Milk pasteurization is a simple process, it would make no sense to ship it, if those buyers were interested in this they could simply set up a processing plant next to the area where they buy the milk from, if you're driving that truck for more than 100 miles to the factory you're already losing money.
The killer for small farms is the fat composition since you need to bump the cow feed to keep the requirements and the daily production, again you need constant, that's why big farms win countries with subsidies are killing small ones in others, but shipping milk twice across the border even with Schengen, neah, when ALDI has a 48 hour requirement for fresh meat/milk/eggs delivery they won't deal with stuff stuck one week in transit.