Milk quotas stay

MILK quotas for farmers will stay and are being accepted by the dairy industry, according to the Commerce and Employment Department. Supplies dropped by more than 2m. litres in the first year that quotas were introduced and milk had to be imported from Jersey to satisfy local demand.

Farmers lost about 20p a litre for milk supplied to the Dairy when the contracts were introduced in 2001.

Instead they received 25p a litre up to the annual quota and the remainder through their new farming contracts in a bid to halt overproduction, which was loss-making for the Dairy.

Milk supplied dropped from 9.8m. to 7.5m. litres, but is now returning to the 8m. litres needed yearly. But each winter production has fallen and a small amount has been imported from Jersey.

'Seasonal variations are unavoidable, but this year we have brought in only three tankers of milk from Jersey,' said Richard Nash, director of client services at the department. 'Farmers have built their herds up a bit and we are almost there to matching quotas.'

The Dairy has plans to work with the farmers to try to boost year-round production and is considering bonuses to stimulate winter production.

Commerce and Employment intends to retain the quota system as part of farm management contracts but will keep it under review to ensure it can effectively manage and incentivise the industry.

More flexibility may be factored into the contracts, allowing farmers to take on enhanced standards in return for a higher payment.

Those who reach only a good but basic standard would be likely to receive less than the 25p a litre they currently get.