CAP reform heralds big drop in prices for Irish milk quota
CAP reform heralds big drop in prices for Irish milk quota
MILK quota prices are set to fall significantly in Ireland, as the country moves to a more regulated market under Agenda 2000.
Full details of the new arrangements from Apr 1 are still awaited, though it is already clear the so-called "restructuring scheme" will assume a greater importance.
Fixed price
Under this programme producers retiring from milk production may submit their quota for a fixed price, explains Irish Farmers Association milk secretary, Catherine Lascurettes. This will then be reallocated, with priority given to small and medium-sized producers in the same region.
Unlike the open market, it also enables retiring producers to dispose of their quota without having to sell off any land.
This season, the scheme has paid Ir£1.55/gallon (26.5p/litre). But this price is now set to fall, with minister of agriculture Joe Walsh recently announcing a new value of Ir£1.36/gallon (23p/litre) from Apr 1 – the cheapest milk quota has ever been in Ireland. Co-operatives may set even lower values within their own regions, and there will be considerable tax concessions for farmers who purchase quota through the scheme.
Open market transactions are to be phased out, with a few exceptions, including whole farm purchase and intra-family transfers.
Announcing the new price, Mr Walsh said he was continuing the course embarked on several years ago to reduce costs for committed milk producers, to help improve competitiveness in the international market.
The volume of milk traded through the restructuring scheme is expected to rise from this seasons 68m litres, to as much as 200m litres. Meanwhile, temporary leasing will be progressively restricted to active milk producers.
Attempts welcomed
The IFA says it welcomes the attempts to make quota more affordable for smaller producers, though there needs to be a reasonable balance to compensate those leaving the industry.
• Ireland is heading for one of its highest ever super-levy bills. Last official figures put excess production at 1.8% at the end of January, or 17m gallons (77m litres) – primarily due to excess butterfat levels. If unchanged, this would give rise to a fine of Ir£22m (£17m), though the IFA believes the final figure will be somewhat less.