MILK quota trading on the internet can be quicker and cheaper, according to developers of a new electronic exchange.
Milkquota.com is claimed to be the first totally interactive milk quota trading system in Britain. It automates trading and removes the administrative burden associated with conventional brokering, says its manager Mark Harrison.
As a result, dealing is based on a flat rate, rather than commission. Leasing costs £50 for each transaction, permanent transfer £100. Price includes Intervention Board fees.
Last year, just under £400m worth of quota was traded, with brokers making about £10m in commission fees. "By charging a flat rate, rather than commission, potentially almost £4m could be cut out of the cost of trading each year," says Mr Harrison.
David Neill, partner with farm business consultants Andersons, who developed the site along with FOL Networks, believes the new exchange will create a national market by removing price variations.
Milkquota.com will be more transparent, he adds. "There are currently up to 200 brokers trading quota in different ways. But the market is determined by vendors and their agents."
The system works by converting quota into kg of butterfat, rather than butterfat %. This allows parcels on offer to be aggregated or split to match the needs of bidders at the lowest cost, automatically. Once a deal is done, it is binding. But no advice is offered to help farmers decide whether to trade or not.
"Our aim is to provide a truly independent trading platform where busy dairy farmers can get on and trade with each other without wasting time or incurring unacceptable delays," says Mr Harrison. Robert Harris *