A major new milk quota trading system has been announced at the ploughing championships by Minister for Agriculture and Food Mary Coughlan.
The new trading system will have two elements, a priority pool and a market pool; the Minister said that the latter will run as an exchange.
Ms Coughlan said yesterday that applications by buyers and sellers to participate in the trading system will be invited before November 24th, which she had set as a closing date for applications.
She said a second run of the trading system will take place in spring 2007 when the results of the first exchange have been fully evaluated in consultation with stakeholders.
Explaining the background to the scheme, the Minister said that last March she had intended to change the manner of transferring milk quota because the current scheme no longer matched the demands of milk producers throughout the country.
"The new system will create a more open market system of transferring 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."
She emphasised that the ring-fencing of milk quotas would remain in place. This system is in place, particularly in the west, to keep milk production in the less advantaged areas.
While the department would run the scheme initially, exchanges would operate in each co-op area and quota transacted through the trading system would be available to purchasers for the 2007/2008 milk quota year.
She said a proportion of quota sold in the system would be reserved for the priority category pool at 12 cents per litre, similar to the current restructuring scheme, and said she was also maintaining the current priority categories in favour of farmers whose leases had expired and for young farmers.
The announcement that 30 per cent of the milk quota will be set aside for young farmers was welcomed by the president of Macra na Feirme, Colm Markey, who said this was good news for them and would ensure that young farmers would not be priced out of the market for quota.
He said initially he had been concerned about the plans to introduce an open market but the scheme as announced had struck a balance between keeping prices down and releasing more quota.
"Farmers in Ireland spent over €300 million on quota since the year 2000 and it is vital that the quota prices are kept down at a time when milk prices are falling."
The Irish Farmers Association said it was glad Ms Coughlan had accepted there be two exchanges in the first year of the scheme rather than one because this would allow farmers a chance to sell or buy quota in the first year and to test the market.
Its dairy chairman, Richard Kennedy, urged the Minister to provide maximum information to farmers on the system through Teagasc, the co-operatives and the farming press.