New rules on sale of milk quota with land

By Paul Mooney

Changes to the rules governing sale of land and milk quota will be signed into effect by Minister for Agriculture Joe Walsh over coming weeks.

The changes will make it possible for sofa milk producers - quota holders who have leased out their quota - to sell their land and quota as a going concern to the highest bidder. At present this is not allowed and where such leases expire the quota holder can only resume milk production, sell to restructuring or sell the quota to the active milk producer who has been leasing and filling the quota.

The rule change will increase the bargaining power of sofa producers in negotiations with lessees interested in buying out leased quota.

The changes are to be introduced in compliance with an EU regulation signed last September, Council Regulation No. 1788/2003 and the changes will be backdated to 1 April 2004.

The regulation followed a legal case taken by a German quota holder.

A number of other changes to quota rules are also expected under the Statutory Instrument being drawn up by the Department of Agriculture. These will ease current restrictions on general sales of land and milk quota as going concerns. However, new restrictions on temporary leasing of quota are expected to be introduced.

The rate of superlevy fine that would be applicable in the new milk quota year and thereafter will be reduced in line with the cut in dairy supports due under CAP reform. The present rate of 36.69 cent per litre will be reduced to 28.66 cent per litre by the 2007/08 quota year.