Individual Transfer Quota - ITQ

DEFINITION of 'Individual Transfer Quota - ITQ'

A quota, imposed on individuals or firms by a governing body, that limits the production of a good or service. If the entity does not produce the maximum amount as set out by the quota, they may transfer the remaining portion of the quota to another party.

BREAKING DOWN 'Individual Transfer Quota - ITQ'

Individual transfer quotas (ITQ) are used to limit the output of a given good or service. For example, due to an import agreement with another country a government may want to impose an ITQ on domestic farmers of wheat . By imposing an ITQ on each farmer, the government can impose a limit on the total production of wheat.

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