Brendan Smith (Cavan-Monaghan, Fianna Fail)

In mid-October I announced the ninth milk quota trading scheme, which is the first of two trading schemes to allocate quota in respect of the 2011-12 milk quota year. The closing date for receipt of applications was Friday, 5 November 2010. The structure of the scheme is largely unchanged from previous years. It operates in respect of each co-operative area and is comprised of a priority pool and a market exchange. Sellers continue to contribute 30% of the total quota offered for sale to the priority pool. The method for calculating the market clearing price, including the 40% price corridor, remains unchanged. The 3:2 ratio governing the distribution of priority pool quota between young farmers and category 1 producers - those with quotas of less than 350,000 litres - remains, as does the option for sellers in certain co-operative areas to sell at 1 or 2 cent per litre less than their original offer price. However, I have reduced the maximum price at which quota is traded in the priority pool, from 6 cent per litre to 5 cent per litre. If the exchange price for a given co-operative area drops below 5 cent per litre, the priority pool price will be the same as the exchange price.

In addition, I have introduced a national component in each phase of the scheme that will allow sellers who have been successful in selling some, but not all, of their quota on the market exchange to dispose of their remaining quota, through a national pool, to purchasers in other co-operative areas who have been unable to have their full requests satisfied. Where necessary, this redistribution will be carried out by the Department immediately after each of the two stages to ensure sellers are not forced to retain some of the quota offered for sale because of insufficient demand in their areas. Such a re-distribution will not involve a separate application process.

I expect to be in a position to announce the results of the first exchange before Christmas. A second exchange will be announced in early January 2011. Full details of the scheme are available from co-operatives or on the Department's website: www.agriculture.gov.ie/dairyingfarming/milkquotas.

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