Canada-Europe free trade agreement could be final in 6 months

[The Mad Monk]

What you didn't mention is that the production per cow rose extremely quickly, so much that farmers had to buy quotas to keep up; a lot simply decided to sell to their neighbor.

The movement was mostly a movement of consolidation between small farmers; we have less farms, but near all of them are still at the family scale.

I view that as an example of how quotas can harm the nation at large. Why limit the amount of product available?

[Fake Boris]

I view that as an example of how quotas can harm the nation at large. Why limit the amount of product available?

You're not exactly "limiting" it, you're adjusting it to demand. The government issues quotas based on demand.

[dannubis]

I view that as an example of how quotas can harm the nation at large. Why limit the amount of product available?

Why ***** about your trade deficit with China then ?

[The Mad Monk]

I never do.

[The Mad Monk]

You're not exactly "limiting" it, you're adjusting it to demand. The government issues quotas based on demand.

You are limiting it. How does the government measure demand?

[Fake Boris]

Wezil: you wanted to discuss the "real issue", so here we go.

Some farmers paid their quota at exorbitant prices. Should the government compensate for their value?

And if the government compensates, should they refund according to price paid, or market value? (knowing that some quotas have never been "paid" for...)

[Fake Boris]

You are limiting it. How does the government measure demand?

I suspect that examining inventory movements is a possible method.

[The Mad Monk]

For that matter, what forces the farmers to buy more quotas if their cows produce more? Can't they just use fewer cows or (as wasteful as it seems) dump excess milk down the drain?

[Fake Boris]

For that matter, what forces the farmers to buy more quotas if their cows produce more? Can't they just use fewer cows or (as wasteful as it seems) dump excess milk down the drain?

Of course they could turn the cow into meat, and yes dumping milk occurs. I would presume that there is more money to be made selling the cow along with the quota to someone who's handling just fine.

[The Mad Monk]

I thought that the point was that they had to buy more quotas, since they're for a certain volume of milk, not per cow. This is what I don't understand. If a given cow produces more, it should make things less difficult and less expensive for the farmer, not more. Why sell under that circumstance? Are they forced to buy a certain amount of quota per cow? Is something else going on?

[Ben Kenobi]

"turn small owners into employees of vast domains",

Which is what is happening at present.

[giblets]

You're not exactly "limiting" it, you're adjusting it to demand. The government issues quotas based on demand.

If quotas didn't reduce the amount produced relative to what would be produced without a quota, the market value of a quota would be negligible.

[Fake Boris]

If quotas didn't reduce the amount produced relative to what would be produced without a quota, the market value of a quota would be negligible.

Two things:

1) Lower interests have raised the prices of quotas
2) The security conferred by a quota is highly valuable

[Fake Boris]

Which is what is happening at present.

Not if you're selling the quota!

[Fake Boris]

I thought that the point was that they had to buy more quotas, since they're for a certain volume of milk, not per cow. This is what I don't understand. If a given cow produces more, it should make things less difficult and less expensive for the farmer, not more. Why sell under that circumstance? Are they forced to buy a certain amount of quota per cow? Is something else going on?

The quota system is on a production basis, not attached to cows.

I would presume that there is a capital investment that depends on your number of cows. If you have to reduce your number of cows, you are under-utilizing your capital and you might want to find a buyer that can afford to use it optimally (he has better margins than you do).

Apparently another significant factor is inheritance. Since quotas have such a high value, children don't have the cash to pay the taxes and decide to sell.