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.


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