IFA backs changes to quota ring fencing rules
The partial removal of quota ring fencing should act as a spur to the dairy industry to plan collectively for future dairy expansion, the IFA has urged.
The new Milk Quota Trading Scheme (MQTS) will allow quota to move out of co-op areas, where there is not enough demand from buyers, and into co-op areas where there is not enough quota to supply the demand.
IFA dairy chairman Kevin Kiersey said the changes would help both buyers and sellers in co-ops with imbalanced quota supply and demand, at a time when it was becoming more obvious that a superlevy situation could arise between now and 2015.
He added that it must act as a further spur to industry to plan collectively how to deal with expansion.
"No farmer must be charged while spare processing capacity is not optimally used," he insisted.
Mr Kiersey said disastrously poor prices and bad weather conditions last year had made farmers forget that a superlevy fine remained possible.
"We may not fill our quota this year, but with the large numbers of replacements bred in the past 12 months, we will almost certainly reach or exceed our quota before 2015, and farmers need to plan accordingly," he warned.
"Our processing industry also needs to plan for expansion, and I am concerned to hear about some milk purchasers' intentions to charge farmers to provide additional processing capacity.