New milk quota trading system revealed

A NEW milk quota trading system was announced by Agriculture and Food Minister Mary Coughlan at the ploughing championships in Grangeford, Co Carlow yesterday.

Applications by buyers and sellers to participate in the trading system can be made up to November 24.

A second run of the trading system will take place in spring 2007, when the results of the first exchange have been fully evaluated.

Ms Coughlan said the new trading system will create a more open market system of transferring quota and will allow farmers much greater freedom to make choices.

It will afford them far greater scope to decide the volume and price of quota they wish to buy. Although the department will run the exchanges initially, they will operate within each co-op area.

Stressing that she was committed to maintaining the principle of regional preference or ring fencing, she said it had sustained a balanced spread of milk production and processing throughout the country.

Quota will be available from the system to certain farmers for 12 cent per litre, but the price for other buyers and for sellers will depend on supply and demand.

The minister will publish the detailed rules, including application procedures, for the operation of the system shortly. Milk quota transacted through the trading system will be available to purchasers for the 2007/ 2008 milk quota year.

ICOS (Irish Co-operative Organisation Society) president Padraig Gibbons said Ms Coughlan’s announcement was important, removing uncertainty and provides clarity in relation to the mechanism for further restructuring.

IFA dairy committee chairman Richard Kennedy said that having two exchanges meant that both sellers and buyers have a real and fair chance to sell or buy quota in the first year.

“Co-ops which will be implementing much of this new regime must not lose sight of the single most important thing for dairy farmers — a strong viable milk price,” he said.

Macra na Feirme president Colm Markey said the minister’s announcement that up to 30% of traded milk quota will be set aside for young farmers at 12 cent per litre was welcome.

Mr Markey said farmers in Ireland spent over €300m on milk quota since the year 2000 and it is vital that quota prices are kept down at a time when the milk price is falling.

ICMSA president Jackie Cahill advised dairy farmers not to pay more than 10c a litre for milk quota.

He said the minister has brought unnecessary uncertainty and increased expectation for farmers selling their quota.