Abstract
The institutional arrangements governing quota mobility influence quota prices and the structural development of the dairy sector. This article considers milk quotas in a number of OECD countries where they are applied under different conditions and with various policy goals. Pressure to free quota markets and to increase quota mobility is inherent in a quota system in a market economy, unless very strict government rules are applied. This implies that quota rights are capitalized in quota prices, which increases the financial burden of new producers, among others. Improving quota mobility by organizing quota trade or leasing will speed up structural development. Empirical research tends to confirm economic theory about the factors which determine quota values. Larger and/or more efficient farms increase their share in milk production by trading or leasing.
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