A prospect of moving towards free milk quota market in Ireland – will milk quota movement follow efficiency?
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Quota trade in Ireland is ‘ring fenced’ to
milk processors where farmers are not allowed to trade
milk quota outside their designated milk processor. This
ensures milk production staying within a region but has
implications for the efficiency of milk production. In this
paper, we simulated a free milk quota market in Ireland
and compared the results with a milk quota exchange
which was ring fenced to determine if the quota move
from an inefficient region to a more efficient region. The
results show that quota indeed follow efficiency of
production when there is restriction over trade area.