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Minister Coughlan announces plans for new Milk Quota Transfer Arrangements

The Minister for Agriculture and Food, Mary Coughlan T.D., today announced plans to move to a more open market system of transferring milk quotas.

The Minister said that she shared the view of many stakeholders that the milk quota restructuring system as it now operates will not meet the future needs of the industry. Dairy farmers recognise that in order to maintain a viable income from their dairy enterprises they will have to increase efficiency and enlarge their holdings.

The Minister added that considering the balance of opportunities and threats that arise from WTO liberalisation on the one hand, and global growth in demand for dairy products on the other, it is essential that we now address the future of quota management in a broader dimension.

A new market led approach to quota transfer is required in order to put the sector on a competitive footing for the future. At present, less than 4% of milk is restructured annually and there appears to be little incentive to encourage quota transfer. It is essential that willing producers be afforded a better incentive so that quota policy can contribute to greater consolidation of holdings and improve the level of profitability. Equally we should attempt to meet the needs of those who wish to exit the sector.

"Against this background, I intend to move in the direction of a more open market system of transferring quotas. While this will operate at co-op level, it could be organised through an exchange system, through direct sales between individuals, through brokers/agents or indeed via the marts. Quota may be sold with or without land and leased with land and a variety of partnership options will be allowed. The new system will be introduced on 1st April 2007 after the current Restructuring Scheme has ended," said the Minister.

Minister Coughlan said that she would start now in preparing the detailed arrangements in association with the stakeholders for what will lead to a more market based approach to the transfer of quotas with the aim of achieving the type of structure that will best contribute to more competitive milk production in Ireland. There is sufficient time to allow for this new system to be developed in consultation with the industry and with the co-operation of all concerned within the sector.

Concluding the Minister added "I believe we can successfully make this step which is essential to the future well being of one of our most important industries".

12 March, 2006

Date Released: 12 March 2006