Mary Coughlan (Donegal South West, Fianna Fail)

The first milk quota trading scheme ran successfully in January and resulted in 120 million litres of quota being offered for sale, with 73 million litres traded. The second stage of the scheme has a closing date for applications of 9 March 2007 and the exchange will be run in April. The trading scheme, which has replaced the restructuring scheme for the 2007-08 quota year, allows milk producers the opportunity to bid for the volume of quota required to meet the development needs of their farm enterprise at a price that will generate a commercial rate of return. In essence farmers may decide on the amount of quota they wish to buy or sell and the price at which they are willing to trade quota. Some 70% of the total amount of quota offered for sale will be transacted on the market exchange and will be sold at the market clearing price. I am satisfied that the new milk quota trading system will create a more open market system of transferring milk quota and will allow farmers much greater freedom to make choices about how milk quota should be transferred, affording them far greater scope to decide the volume and price of quota they wish to buy.

The milk quota regime in Ireland is operated at milk purchaser-co-operative level in accordance with the regulations set by my Department. Under the old restructuring scheme, a primary condition of the scheme was that quota sold into the restructuring pool by a co-operative's suppliers was available for purchase by them in the first instance. The new trading scheme is also operating at milk purchaser level and, as under the old scheme, anomalies arise in smaller co-operatives where there is excess supply of quota. However, I have made provision in the new scheme to allow milk purchasers to group together for the purposes of trading quota, without having to form a registered group of purchasers under the milk quota regulations.

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