Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 425: To ask the Minister for Agriculture and Food the steps she is taking to increase the amount of milk quota available in the second phase of the milk trading scheme. [4058/07]

Mary Coughlan (Donegal South West, Fianna Fail)
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I was very pleased with the results of the first milk quota Trading Scheme, which I announced last Wednesday. As the Deputy will be aware the scheme has two elements — a Priority Pool and a Market Pool, the latter functioning through an exchange mechanism. The Trading scheme allocates some 70% of the total quota offered for sale to the Exchange at which a market-clearing price is computed based on a supply demand model.

In the first exchange the market price ranged from 11 cent per litre to 23 cent per litre, reflecting the regional diversity of quota demand. The remaining 30% was allocated to buyers who qualified as priority category producers either being successors, lost leaseholders, young farmers or category 1 producers. The price at which the Priority pool was allocated was fixed at a maximum of 12 cent per litre and this price was achieved in all but one Co-op.

The total amount offered for sale was 121 million litres and a total of 173 million was demanded. Some 73 million litres was sold through the Trading Scheme of which 44.4 million was sold at the exchange or market price and 28.6 million litres was sold at or below the maximum price of 12 cent from the priority Pool.

Given the exceptional circumstances of the first ever market trading of milk quota in Ireland and the significant learning curve involved for all concerned, dairy farmers and co-ops particularly, this outcome was extremely encouraging. Of course it was but the first of two schemes that will enable the transfer of quota for the 2007/2008 milk quota year that commences on 1st April next. I expect that there will be very significant interest in the next scheme given the additional knowledge now available to buyers and sellers as a result of the first scheme.

In the circumstances that all parties understood that there would be two schemes available for the next milk quota year I do not propose at this stage to make alterations to the next scheme, which I will announce very shortly after consultations with the main farm organisations and ICOS have concluded.