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Smith Announces Fifth Milk Quota Trading Scheme

Priority Pool Price Reduced to 10 cent

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD, today announced the fifth Milk Quota Trading Scheme, which will be the first of two Trading Schemes to allocate quota in respect of the 2009/2010 milk quota year.

The Minister confirmed that the structure of the Scheme will remain largely unchanged. It will again be run in respect of each Co-op area, and will be comprised of a priority pool and a market exchange. Sellers will continue to contribute 30 per cent of the total quota offered for sale to the priority pool. The individual bid limit for buyers will remain at 80,000 litres, and the method for calculating the market clearing price, including the 40 per cent price corridor, will remain unchanged. The 3:2 ratio on the distribution of priority pool quota between young farmers and category 1 producers will be retained, as will the option for sellers in certain Co-op areas to sell at one or two cent per litre less than their original offer price.

The main changes arise in the administration of the priority pool. The maximum price at which quota is traded in the priority pool will be reduced to 10 cent per litre, unless the exchange price for that Co-op area drops below 10 cent, in which case the priority pool price will be the same as the exchange price. In addition, participants in Milk Production Partnerships, whether new entrants or long-standing milk producers, will have access to quota in their own right as individuals, whether on the basis that they are under 35 years of age or that their existing quota is less than 350,000 litres. Farm Managers participating in partnerships with established milk producers will have access to quota on the same basis. The Minister also confirmed that, contrary to previous Schemes, new entrants over 35 and those who previously sold all or part of their quota into a Restructuring or Trading Scheme will be allowed to purchase quota under the 2009/2010 Scheme.

"It is clear from the review with the farming organisations and ICOS that there is no need to radically alter the structure of the Milk Quota Trading Scheme this year. My attention has rather been focussed on the question of access, and on how to adapt the Trading Scheme so that it complements the recent changes to the milk quota regulations, particularly in relation to Milk Production Partnerships and attracting new blood into the industry."

The Minister announced that the closing date for receipt of applications to the fifth Milk Quota Trading Scheme will be Friday 3 October 2008. Details of the Scheme will be published in the farming press next week and application forms will be available from Co-ops shortly thereafter.

In conclusion, the Minister expressed his appreciation to the farming organisations and ICOS for their constructive engagement in the consultations on the operation of the Trading Scheme, and looked forward to their contributions to the next review, which is likely to take place before the end of the year.

Date Released: 20 August 2008