The prospect of a cross-border milk quota trade between Britain and Italy moved closer this week after UK quota broker Ian Potter lodged transfer forms with the Rural Payments Agency and its Italian equivalent.
Potter said he expected the application for UK farmers to sell nearly ten million litres of quota to Italian producers to be rejected, since cross-border transfers were illegal.
However, he warned the decision would be challenged. “The Italians are gunning for a legal
fight. They have the money and determination to take the battle all the way. They know if they do nothing, no change will occur. Only by forcing the issue through legal action will they stand a chance of securing change. They will not give up.”
But British farmers are split over the initiative. Dairy UK’s Farmers’ Forum, which advises the trade body on agricultural matters, said that cross-border quota trading would bump up the price of quota and make life harder for farmers wanting to expand.
Jim Begg, Dairy UK director general, said: “The value of quota in the UK is almost nil. Farmers find that a positive thing because it helps go-ahead, efficient farmers to expand.
“If we set up an international market for quotas it would re-establish value. This would be against the interests of producers in this country who wanted to expand.”
But Potter said: “Farmers are saying to me that if milk processors don’t want to see quota migrating abroad they will have to pay a better price to ensure it is more profitable to milk against the quota than it is to trade it.”
The UK has 14 billion litres of milk quota. A litre trades at 4p in the UK, compared with 20p in Italy.
Richard Clarke & Chris Walkland
Potter said he expected the application for UK farmers to sell nearly ten million litres of quota to Italian producers to be rejected, since cross-border transfers were illegal.
However, he warned the decision would be challenged. “The Italians are gunning for a legal
fight. They have the money and determination to take the battle all the way. They know if they do nothing, no change will occur. Only by forcing the issue through legal action will they stand a chance of securing change. They will not give up.”
But British farmers are split over the initiative. Dairy UK’s Farmers’ Forum, which advises the trade body on agricultural matters, said that cross-border quota trading would bump up the price of quota and make life harder for farmers wanting to expand.
Jim Begg, Dairy UK director general, said: “The value of quota in the UK is almost nil. Farmers find that a positive thing because it helps go-ahead, efficient farmers to expand.
“If we set up an international market for quotas it would re-establish value. This would be against the interests of producers in this country who wanted to expand.”
But Potter said: “Farmers are saying to me that if milk processors don’t want to see quota migrating abroad they will have to pay a better price to ensure it is more profitable to milk against the quota than it is to trade it.”
The UK has 14 billion litres of milk quota. A litre trades at 4p in the UK, compared with 20p in Italy.
Richard Clarke & Chris Walkland
No comments yet