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Smith Announces Seventh Milk Quota Trading Scheme

Priority Pool Price reduced to 6 cent per litre

The Minister for Agriculture, Fisheries and Food, Brendan Smith, T.D., today announced the seventh Milk Quota Trading Scheme, which will be the first of two Trading Schemes to allocate quota in respect of the 2010/2011 milk quota year.

There are two changes to the Scheme compared to last year. The maximum price at which quota is traded in the priority pool will be reduced from 10 cent/litre to 6 cent/litre, unless the exchange price for that Co-op area drops below 6 cent/litre, in which case the priority pool price will be the same as the exchange price. In addition, the individual bid limit for buyers will be raised from 80,000 litres to 100,000 litres. "It is clear from the review with the farming organisations and ICOS that the structure of the Milk Quota Trading Scheme does not require radical alteration this year. I have decided instead to reduce the price of priority pool quota to a level that I think more accurately reflects the current value of quota, and I have also made it possible for buyers to obtain slightly larger amounts of quota than in previous years", said the Minister. 

The Minister confirmed that the structure of the Scheme will otherwise 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 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.

Minister Smith announced that the closing date for receipt of applications to the seventh Milk Quota Trading Scheme will be Friday 23 October 2009. Details of the Scheme will be published in the farming press next week and application forms will also be available from Co-ops next week.

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.

Date Released: 18 September 2009