Direct payment will impact on restructured schemes
Priority category bands have been increased, from 200,000 litres (about 44,000 gals), to 250,000 (about 55,000 gals) in Category 1 and from 300,000 (about 66,000 gals) to 350,000 litres (about 77,000 gals) in Category 2. Category 3 will therefore be above 350,000 litres (about 77,000 gals).
Priority re-allocation of the restructuring pool continues to successors of producers who sold into restructuring schemes in the past, and lessees unable to renew existing leases. And 25% of the available pool will be prioritised to new and recent entrants.
Announcing the details, Agriculture Minister Joe Walsh said the direct payment premium, starting this year, and becoming a decoupled payment in 2005, will have a major impact on the restructuring schemes. A producer who holds a quota on March 31, 2005 will establish entitlement to the premium and, since it will be decoupled, will retain it even if he or she ceases milk production. But there is no direct payment entitlement with quota purchased from a restructuring pool in 2005 or after. The Minister did not think it appropriate to fix a restructuring price for 2005 at this remove, other than to say quota sold after 2004 would not include the value of the new decoupled dairy premium, and this would have to be reflected in a substantial reduction in the price of that quota.
Dominic Cronin, ICMSA, said the 2005 restructuring price is the key issue for many farmers contemplating leaving the sector, and he expressed disappointment that the Minister did not name the price. Macra national president Thomas Honner said it was crucial that the arrangements for 2005 were decided and announced as soon as possible.
He reiterated Macra’s policy that quota should have a nil value post decoupling.
