can generate.) For example, an average dairy farm in Ontario or Quebec
has about 90 cows and produces about 2300 litres of milk per day. The
market value of the quota required to produce this amount of milk is
approximately $2.2 million. The ownership of a quota therefore
represents a considerable asset for those producers who were lucky
enough to receive it (for free) when it was initially issued by the
government. But for new producers wanting to get into the industry, the
need to purchase an expensive quota represents a considerable obstacle.
These large costs of purchasing the quota offset the benefits from selling
the product at the (quota-induced) high price.
