A legal challenge to the embargo on cross-border EU milk quota transfers has moved a step closer.
One of the UK’s leading quota brokers, Ian Potter, flew to Italy this week to meet lawyers representing a consortium of farmers that has agreed to buy quota from Hungarian farmers.
The deal has been lodged with bodies in Italy and Hungary equivalent to the UK’s Rural Payments Agency.
Officials are likely to block the transaction on the basis that cross-border quota sales are illegal. But the Italians say they are
prepared to challenge this decision through the courts.
Potter said that he did not dismiss the possibility that something similar could take place involving UK farmers.
“I think that the Italians could be on to something with cross-border trading. Although I am still cautious about this, I do not intend to let British farmers miss out by not fully exploring a potential opportunity.”
Potter said that the Italians were keen to buy an initial 100 million litres of quota from farmers in the UK, which has an annual quota of 14 billion litres.
Farmers in Holland and Ireland are also eager to secure more quota, while producers in the UK quitting the industry because of low prices will be keen to see foreign demand increase the price of what was once a valuable asset. Ten years ago, quota was changing hands at a peak value of 80p a litre. Now it is worth just 4-5p.
Potter said that the risk of an exodus of milk quota abroad would alarm processors and retailers here and could bolster British milk prices.
He added: “If processors want UK quota to remain in the UK, they will have to make sure it is more profitable for farmers to milk it than to trade it.”
Chris Walkland