Allen calls for five-year freeze on price of milk quota

FIX the price of restructured milk quota at its current level for five years, Agriculture Minister, Joe Walsh has been advised by former ICMSA President, Frank Allen.

He has warned that current uncertainty about transfer of milk quota between farmers could seriously damage the industry going forward.

In mid-November, Minister Walsh said he was still considering how to improve the Restructuring Scheme, which is now the main quota transfer scheme.

Mr Allen said that without a clear indication of the way forward on milk quota price, the potential benefits of the Restructuring Scheme for producers will be restricted.

“I believe that the milk quota price for restructured quota should be fixed for five years in order to give certainty and stability to the restructuring system. I would favour fixing the price at current levels, maybe a slight reduction if that is deemed appropriate but certainly not more than the present price”, he said.

“Some people will hold back on the expectation of a sudden increase in price at some stage and that is not desirable.

“We want stability and order, so that people will go out in an orderly fashion and also that the people buying the quota will be able to afford it and will be able to get additional quota every year, bit by bit, especially smaller producers, because they would not be able to finance a large purchase at any one time”.

Mr Allen said that Ireland should learn from the bad experience in the UK where quota was freely available and farmers purchased in large quantities and ended up in financial difficulty. He was not against Minister Walsh’s intention to reduce the cost of quota in the Restructuring Scheme, but he would like to see the price being at a reasonable level for those getting out of milk.

He agreed with limits on temporary leasing, to ensure that holders of milk quota were using it, or selling into restructuring; but provision must be made for families with health problems.

Meanwhile, Minister Walsh has asked the Milk Quota Review Group to make further submissions to enable him to address future policy on restructuring, particularly price and the lack of quota for restructuring in some parts of the country.

He said 550 million litres (120 million gallons) has been re-allocated to committed milk producers since quota regulations were changed in April, 2000. The average permanent quota size held by active producers is now more than 20% greater than in 1999.”