Caution aired on quota

INVESTING IN quota at current market values to bolster SFP entitlements could be a retrograde step for most producers, warns Andersons.

The estimated future SFP value for additional quota up to 2012 is 6.9p/litre for England and 14.6p/litre for Wales.

With market value of leased quota at 8.8p/litre and purchase at 17.5p/litre, only leasing of quota for Scottish/Welsh producers looked viable, said Andersons‘ David Oliver.

Inflation and the potential cost of borrowing would push the SFP values back 10%, making the benefits even more marginal unless producers were acquiring quota to cover production and/or to ensure payments from dairies.

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