The Inefficiencies of Regionalised Milk Quota Trade |
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| Authors: | Thia Hennessy Shailesh Shrestha Laurence Shalloo Michael Wallace |
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| Institution: | Thia Hennessy and Shailesh Shrestha are researchers at the Rural Economy Research Centre, Teagasc, Galway, Ireland. E‐mail: for correspondence. Laurence Shalloo is a researcher at the Moorepark Research Centre, Teagasc, Cork, Ireland. Michael Wallace is a lecturer at the School of Agriculture, Food Science and Veterinary Medicine, University College Dublin, Ireland. The authors wish to acknowledge the provision of Department of Agriculture, Forestry and Food Stimulus Research funding for this research, and the helpful comments of anonymous reviewers and the editors in preparing this paper. |
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| Abstract: | This paper estimates the inefficiencies associated with the regionalisation of the milk quota trade. An optimisation model is developed to estimate the economic value of quota. Quota values are aggregated to derive quota sale and purchase curves under two scenarios: first, where quotas can be traded nationally and second, where the trade of quota is regionally restricted. Quota trade is simulated and the consequent effects on supplier structure estimated. Through the derivation of sectoral cumulative cost curves it is possible to estimate the impact of regionalising quota trade on sector efficiency. The model is solved using National Farm Survey data from Ireland and the inefficiencies of regionalised quota trade in Ireland are estimated at €27 million. The paper concludes by discussing the implications of restricted quota trade, especially in the context of eventual quota removal. |
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| Keywords: | Cumulative cost curves milk quota optimisation modelling quota trade C61 D21 Q12 Q12 |
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