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 make changes in 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 in the coming years and that the Irish dairy sector is positioned 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. 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 provisions of Article 8 of the European Community regulations, I have decided that with effect from 1 April 2000 milk quota will no longer transfer with land, subject to certain exceptions. Those exceptions will cover family transactions, renewals of existing leases between the original lessor and lessee, sale of a dairy 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 in the national regulations.
Apart from the exceptions outlined above I have decided that, under the provisions of Article 8(b), the transfer of milk quota will be through a scheme to be operated by way of a pooled system at co-operative or 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 or dairy. The co-operative or dairy, in turn, may sell milk quota only to pro ducers attached to that concern on the basis of priority categories and detailed rules which will be determined in advance.
The maximum price for the sale of milk quota under this scheme will also be fixed at national level and priority will be afforded to small and medium size producers.
Additional Information.
In this regard, I welcome the recent announcement by the Minister for Finance of favourable tax treatment in the purchase of quota. This will enable his scheme to operate all the more effectively.
With effect from 1 April 2000, it will be no longer possible for quota holders, not engaged in milk production, to temporarily lease their milk quota under the provisions of Article 6 of Council Regulation (EEC) No. 3950/92 and Regulation 16 of the European Communities (Milk Quota) Regulations, 1995, where the milk quota has been temporarily leased for the preceding three milk quota years (1997/98, 1998/99 and 1999/2000) or for a longer period.
In cases other than these it will be open to quota holders to offer all or part of their quota into the temporary leasing scheme, which will continue to operate after 1 April 2000. The maximum price of quota under the scheme will continue to be set at national level. As in the past, the milk quota review group will be consulted in relation to that as well as in relation to establishing the priority criteria for producers purchasing quota under the scheme. I have consulted widely before taking these decisions and I believe they have the support of those involved in industry.
