The regulatory framework arising from the Agenda 2000 agreement allows for greater flexibility in the operation of the milk quota regime. I have decided to take the opportunity to make changes to the system which operates in Ireland to ensure that active, committed producers have greater access to quota on a permanent basis at a reasonable cost over the coming years and that the Irish dairy sector is well prepared to face the competitive challenges that lie ahead.
On 13 October, I announced my intention to introduce by way of national regulations applicable from 1 April 2000 an arrangement for the transfer of milk quota other than the current system whereby such quota transfers with land. This is in accordance with the provisions that now exist under Article 8 (a)(b) of Council Regulation (EEC) No. 3950/92.
The objectives of the new arrangements are to provide for more flexibility and certainty for milk producers in the operation of the milk quota regime, greater priority access to additional permanent milk quota for small scale and medium size producers, the retention of as many dairying enterprises as possible, and greater competitiveness within the Irish milk production sector.
Under the existing system of quota transfer linked to land producers were often unable to expand their enterprises and realise their full potential because of the uncertainty within the quota system and the limited availability and cost of additional quota. Furthermore, in many cases producers were required to take on additional land which they did not need for their farming operation to acquire extra quota. This imposed an additional cost and made it difficult for small and medium scale producers to acquire quota. The option of temporary leasing quota existed, but this had the disadvantage that it operated only until the end of each quota year and did not give the certainty which active producers needed to expand their dairy enterprises.
The exceptions to the new arrangements will cover family transactions, renewals of existing leases between the original lessor and lessee, sale of a holding as a going concern and the transfer by way of lease or sale of land purchased with quota between 13 October 1999 and 31 March 2000. Detailed conditions in relation to these exceptions will be defined.
Apart from the exceptions outlined above I have decided that, under the provisions of Article 8(b) of Council Regulation (EEC) No. 3950/92, the transfer of milk quota will be through a scheme to be operated by way of a pooled system at co-operative/dairy level.
Under this scheme, quota holders may, at the end of each milk quota year, offer all or part of their milk quota for sale to their co-operative/dairy. The co-operative/dairy in turn may only sell milk quota to producers attached to that concern under detailed rules that I will determine. While all producers will be entitled to purchase milk quota under this scheme, priority will be accorded to small and medium-sized producers.
The maximum price for the sale of milk quota under this scheme will be fixed at national level.