5 May 1995

Bid to make milk quota rules farmer-friendly

IRELANDS milk quota transfer schemes are under review by Department of Agriculture officials.

They are consulting with Irish farming leaders in a bid to make the schemes, which operate under EU rules, more relevant to the countrys 45,000 milk producers.

Catherine Lascurettes, Irish Farmers Association dairy committee secretary, says existing schemes give priority to farmers producing fewer than 30,000gal (136,000 litres) – about 75% of the countrys milk producers.

"That would be considered in Eire as the threshold between the small producer and the middle-sized producer. Most schemes we have are targeted towards those," she says.

"They are the backbone of the Irish dairy industry but a number of them, through the schemes, have been in a position to increase their quota size and have brought themselves above 30,000 gallons."

Although they may be considered big in relation to most Irish milk producers, they are still not in a position to buy quota on the open market, adds Ms Lascurettes.

"We have made suggestions that a larger proportion of the fleximilk could be given to producers in the 30,000-50,000 gallon category," she says (see panel).

After pressure from the IFA, government is also negotiating with the European Commission to simplify the quota restructuring scheme.

It operates to redirect quota to small producers and offers "a fairly attractive" 50p/gallon (11p/litre) subsidy for quota purchase. But eligibility criteria are strict and the IFA believes there is scope within the budget to relax the rules.

About IR£8m was available in the past two years – with 70% of the money coming from EU structural funds. Last year only about IR£3.7m was spent.

About 4000 producers applied for quota under the scheme last year. But many applications have still not been processed because of delays in checking forms. Many producers who offered quota under the scheme have also not yet been paid.

Government plans to "ring-fence" quota in the disadvantaged areas have also raised concern. The move is an attempt to stop quota flowing from these areas and concentrating in the hands of bigger producers.

30-mile limit

Under the proposals quota in the ring-fenced areas will not be allowed to travel more than 30 miles from the home holding.

But the IFA maintains that ring-fencing is a negative step and may work against the people it seeks to support.

"Our own policy would be that the best way to maintain quota is nurture demand locally," says Ms Lascurettes.

Ring fencing could also be open to legal challenges, she suggests because it limits individual farmers rights – and that might not sit comfortably with the Irish constitution.

She is also hesitant in offering support to the UKs lobby to introduce EU-wide quota trade. "In a situation of international trade in quota there will be winners and losers.

"Before we can make a final decision we would have to be convinced we are winners."

Temporary leasing

This scheme opens for applications in May, October and December, and is administered by co-ops, who act as quota agents for the Department of Agriculture.

Producers can transfer all or part of their quota to the co-ops. They are paid the same price charged to producers who lease. Prices are capped by the department at 27p/gal (6p/litre).

Top priority is given to those producing less than 30,000gal (136,000 litres). About 5% of available quota is set aside for new entrants. Provisions also exist for herds affected by disease when quotas were introduced.

Producers with between 30,000 and 50,000gal (136,000-227,000 litres) are given second priority. Other producers are ineligible.


All unused quota is made available through the co-ops and can be competed for from Mar 31. Producers with less than 30,000gal (136,000 litres) are given top priority and account for 70% of fleximilk allocations.

Producers with 30,000-50,000gal (136,000-227,000 litres) are allocated 20% of the pool, with 10% remaining for others regardless of size.

Quota restructuring

A 50p/gal (11p/litre) subsidy is offered under the scheme for permanent quota transfer. Prices are capped at IR£2/gal (44p/litre) for this year. To qualify for the subsidy farmers must produce less than 20,000gal (90,920 litres); have a total income of £15,000 or less with no more than one-third earnt off-farm. New entrants and small-scale producers of less than 30,000gal (136,000 litres), who do not qualify for subsidy, can also apply for quota.