Seymour Crawford (Cavan-Monaghan, Fine Gael)
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Question 4: To ask the Minister for Agriculture and Food the position regarding the new quota exchange scheme; the price the quota will be sold and bought at; the situation regarding the milk quota in the year 2013 or before; and if she will make a statement on the matter. [40705/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The milk quota trading scheme 2007-08, which supersedes the milk quota restructuring scheme, will have two application periods allowing for the exchange of milk quota with effect from 1 April 2007. The first application period closed last Friday, 24 November 2006 and I expect to announce details of the second application period early in the new year. The trading scheme has two elements, a priority pool and a market pool, the latter to function through an exchange mechanism. Some 70% of quota offered for sale will be sold though the exchange, and sellers will receive a market price for quota based on supply and demand. The remaining 30% will be sold at a maximum price of 12 cent per litre to priority categories, namely successors, dairy farmers whose leases have expired, young farmers and category 1 producers. This price of 12 cent per litre is the same as that available for the full amount of quota sold into this year's milk quota restructuring scheme.

My Department has commenced the process of validating applications to buy and sell quota with the co-ops. When this work is completed the exchange will be run in early January and the results will be communicated to applicants through the co-ops at that time.

As regards the future of milk quotas, the position is that the EU milk quota regime was extended to 2015 as part of the Luxembourg Agreement on the reform of the CAP. The Commission may bring forward proposals as part of the 2008 health check to modify that position, which in turn may require a Council decision. I will keep the position under close review and in the meantime I will continue to facilitate the transfer of milk quota to active and progressive dairy farmers.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I wonder whether the Minister knows at this stage what interest there has been in the actual seller quota. She may recall the sham that arose last year with the two announcements within 24 hours of each other which meant that literally no quota was sold. I understand her reasoning behind this new scheme was to release the maximum quota so that younger farmers and those interested could take it. My information is that there is no great enthusiasm among sellers at present. There appears to be an enormous lack of understanding as to how this system should work.

On the last part of my question on the future of the milk quota, since the Minister expressed her belief some time ago that it was ending, can she give the House any further indication of her stand in this regard and when it is likely to happen? It is only in this situation that farmers are able to gauge what they can afford to pay. From the information I have, certainly in the northern areas, the amount of money that is being offered by buyers is not so different from what the price is for the 30%. Is that the situation further down the country or can the Minister say whether there will be major differentials?

Mary Coughlan (Donegal South West, Fianna Fail)
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For the Deputy's information, I have received more than 5,500 applications from dairy farmers. Buyers account for 4,700 of those applications and more than 850 have applied to sell. The amount of quota involved for this part of the year is 125 million litres. Some 125 million litres were sold the previous year, but this is only one half of the quota year because as the Deputy knows there will be a further opportunity in February and March. I will be announcing the date fairly soon at the beginning of the year, after we have evaluated the outcome of this one.

At this stage I cannot give the Deputy any notion on price because we are just going through the system to determine what variations exist at the moment. Therefore, contrary to concerns that existed heretofore, we have significant interest in this scheme, and that is good to see. As regards the future of quotas, the Commissioner indicated that she had a personal viewpoint, as had the Commission. The Commissioner, not I, indicated that the relevance of quotas was something that had to be questioned. As the Deputy knows we are now in the 2008 health check situation, looking at the reform of the quota regime. It will take place after 2015, because this comes under the Luxembourg Agreement. However, we are taking a strategic view on how we develop and support efficiencies within the system and allow the issue of scale to be dealt with. It is on the basis of those policy frameworks that we are working towards what we should like to achieve.

The issue of whether quota will be removed has not been decided. It will be a matter for Council and for some fairly serious discussions and negotiations in due course. However, no definitive view has been expressed by either me or the Government on where, in fact, we should stand on this issue. It is one that will have to be developed in consultation with Members of the Oireachtas, the Joint Committee on Agriculture and Food and the farming organisations.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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The Minister has said that what is being made available is similar to last year. However, last year was the lowest for a long time. How does it compare with the previous year and will any steps be taken to encourage the movement?

Mary Coughlan (Donegal South West, Fianna Fail)
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My view is that when we take a full year amount which will straddle both the end of this year and the beginning of next there will be much more interest than in previous years in the purchase and sale of quota.

Séamus Pattison (Carlow-Kilkenny, Labour)
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That concludes Priority Questions as Deputy Sargent is not present.