Confusion in the dairy farm market

By Declan O'Brien

The market for dairy farms has been thrown into total confusion by the absence of concrete information on the proposed changes to the milk quota regime.

Since the Department announced that the land/quota link was to be broken from April next year, auctioneers and farm consultants have been inundated with queries from farmers.

In most cases they have been unable to give definitive answers as the relevant information is not available from the Department. And it appears that this situation will continue for another few weeks, at least.

It is understood that the Department is waiting for a reply to 13 questions regarding the proposed changes which were forwarded to the Commission. The legal implications are being assessed by the Attorney General's office.

In the meantime farmers have been left in limbo.

"An awful lot of people are looking for answers to very specific questions but they are not getting them. As a result there is a lot of uncertainty and confusion out there," Tralee farm consultant, Eddie McQuinn maintained.

"It is essential that guidelines for the new regime are clarified and published by the Department as soon as possible so that farmers can make concrete plans," he said.

While most of the enquiries concern either the sale or lease of land and quota, the proposed changes have also raised questions regarding such schemes as the Farm Retirement Scheme (FRS).

One auctioneer said farmers were reluctant to enter the present scheme (which closes on December 31) in case they lose their quotas once the regulations changed.

Under the new proposals a three year retrospective limit has been put on temporary leasing. After the third year the quota holder must either produce the milk or sell it into restructuring.

However, a Department official confirmed that provision will be made for farmers considering entering the present FRS. How these farmers will be catered for was not outlined but he insisted that the quotas will be protected..

He said the successors of those quota holders who opt to join the existing FRS will be entitled to use the milk quotas at the end of the leases, if they so wish.

On the question of future quota leases, the Department official warned farmers that any new leases which do not involve the supply of milk in the last quarter (January-March) of the current quota year could fall foul of the new regulations.

While a definite decision has not been taken on this, he said farmers entering such leases "were doing so with their eyes wide open" and in the knowledge that "the rules are going to be changed".

Some dairy farm sales could also come under the remit of the new regime, particularly where the full quota has already been supplied for the present quota year. The Department is understood to be taking legal advice on the matter.

Meanwhile, it is widely rumoured that the Government will have to enact fresh legislation in order to introduce the new regulations. The Department had hoped that a statutory instrument which would be covered by existing community law)would have sufficed.