As the dairy industry is gearing up for the post quota regime, we recall that the regulations were introduced originally for 5 years but the continuation of those regulations resulted in a whole generation of dairy farmers controlled by limitations on milk production.  However, we must recall that at the time of its introduction in 1984, there were exceptionally high levels of intervention stocks.

 

                        Butter               SMP

1983           600,000             900,000

1984           800,000             500,000

1985           850,000              400,000

1986           1,100,000           600,000

1987           800,000             400,000

 

On the introduction of milk quotas there were 68,000 active dairy farmers.  The profile of dairy farmers is as follows:

 

Year          < 180,000 litres (40,000 gallons)         Total

1984                 96%                                                68,000

1996                 80%                                                36,750

2013                26%                                                  17,985

 

We have to recognise that the dairy industry embraced the regulations and the main national objectives ensured that the severity of the regime was spread throughout the dairy sector.  The main national quota objectives would be as follows:

 

1. To ensure that the national quota was fully utilised on an annual basis
2. To maximise milk production in Ireland
3. From a socio-economic point of view to ensure that smaller scale producers were given priority access to quota through the various quota mechanisms
4. Minimise the levy

 

 

 

Equally important is that over that time period, dairy farmers invested in expanding their own volume with 2238.3 million litres traded through the restructuring and trading schemes to the value of €688m.  In addition, leases were bought out and quota was also purchased with land.  On the downside, dairy farmers also paid a superlevy bill of €149.5m in 16 of the 30 years of the regime to date.

 

We ask ourselves did the schemes work?

 

We have to admit that all the schemes generally worked very well and achieved the objectives set out.  The industry changed during the quota regime as seen fit to get more quota into the active producer’s hands:

 

1. Land leases abolished
2. 100% Long term temporary leasing abolished
3. Criteria of the schemes simplified over time
4. Milk Quota Trading scheme brought in for the market in each co-operative to decide the price paid for quota
5. Soft Landing

→ 2% quota increase, April 2008

→ Halving the butter fat

→ 1% increases, 2009 – 2013 (5 years)