Thank you for the question.
Yes, the high value of quota is a concern for us in the dairy industry. We are taking measures to address that issue.
One of the problems with the purchase of quota is that it's the only way we, as dairy producers, can increase the scale of our businesses. With all the pressures that have come to bear on us over the last number of years, the economies of scale come into play very strongly within our industry. Because we're in somewhat of what we call a mature industry, and there's not a lot of growth in the marketplace, we have to look to other ways to acquire quota, which is really to buy it from a producer who's retiring from the industry. There's tremendous competition for that, because we have a lot of producers who want to grow their businesses to actually remain viable in an industry that is somewhat stagnant.
Here in Nova Scotia we are involved in an agreement with four other provinces, what we call the P5--Quebec, Ontario, New Brunswick, P.E.I., and Nova Scotia--whereby we share our revenues. We all get paid the same price for our raw product. In all those provinces, except P.E.I., since about last mid-November, we've put policies in place to address the high value of quota.
We've all done different things. In Nova Scotia, for example, at our annual general meeting, which was held in January, we passed new quota policies, which will mean that in the future, after May 1, 30% of any quota that is purchased in the province, when it is resold, will be recaptured by the industry and redistributed to current entrants in the industry. In other words, if you buy 10 kilograms of quota, when you go to sell it after May 1, you'll only be selling seven kilograms. The other three kilograms will be redistributed throughout the industry.
We also have put a cap on the price of quota in Nova Scotia. Our capped price is $30,000 per kilogram. We will not accept bids for any amount over that. So yes, it's a very serious issue, and we as producers are addressing it.