How is the dairy price stabilization program any different than a quota system?
A. The Dairy Price Stabilization Program is not like the government-run quota system in Canada and Europe, says Vander Dussen. Quota is fixed and permanent. Quota can be transferred from producer to producer, but it requires a massive transfer of capital (more than $30,000 per cow in Canada) from the new or expanding producer to the retiring producer. This severely hampers the continuing producer from investing capital in production efficiencies. It also creates a barrier to entry. The Dairy Price Stabilization Program creates a financial incentive for dairies to actually pay attention to how much milk they are producing, says Vander Dussen. While there is a base utilized under this program, it is earned and expanded with the market. It does not accrue value, because it cannot be sold. It does not accumulate value, because the price to earn it is modest and producers can choose when it makes sense for them to expand and therefore earn additional base. Q. How long would it take to imple
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