Mixed reaction to open-market quota system

THERE has been a mixed initial reaction to the announcement by Agriculture and Food Minister Mary Coughlan that she intends to move to a more open-market system of transferring milk quotas.

Ms Coughlan, who announced her intention at the Fianna Fáil agriculture and food conference in Birr, Co Offaly, last Sunday, said a new market-led approach to quota transfer is required to put the dairy sector on a competitive footing.

Macra na Feirme leader Colm Markey said he was opposed in principle to a more market driven system which would result in an increase in the price of quota.

Young farmers and small to medium sized producers would find it very difficult to compete for quota in an open market situation.

Glanbia deputy group managing director Geoff Meagher, who welcomed the Minister’s announcement, said 73% of respondents to the Glanbia dairy farmer survey conduced in 2004 stated their future in milk production was dependent on achieving on average 52% more quota.

“The challenge now will be to implement a scheme that will be attractive enough to encourage maximum farmer participation in the next two years.

“This will require the availability of quota for those who wish to expand at a viable market rate. It must also be structured in such a way that is meaningful in terms of helping those who wish to exit,” he said.

However, the ICMSA president Jackie Cahill described the Minister’s move as disastrous and predicted that it will result in higher milk quota costs and fewer dairy farmers.

IFA Dairy Committee chairman Richard Kennedy promised to consider any proposals from the Minister that would help to free up quota for active producers.

ICOS director general John Tyrrell described the Minister’s move as a significant development.