October 4, 2006

 

EU countries pay a total levy of EUR 377 million for exceeding milk quotas

 

 

Milk levy in the EU last year reached EUR 355 million, according to a provisional calculation by the European Commission.

 

Milk is marketed in the EU on the basis of quotas to balance supply and demand. Each member state receives two quotas, one for deliveries to dairies, the other for direct sales to consumers.

 

When the national quota is exceeded, producers who have contributed to the excess quantities are required to pay the levy.

 

Of the nine countries exceeding the quota, three of them accounted for 90 percent of the levy-- Italy, Poland, and Germany.

 

However, the levy for Poland, which stands at EUR 91 million, is likely to be greatly reduced through the conversion of unallocated direct sales quota to delivery quota.

 

The worst culprit was Italy, which incurred a levy of EUR 189 million. Not surprisingly, the country would like to see the quota system dropped. France on the other hand, which is a quota under-producer, would like to see it maintained.

 

The total overrun in the 25 EU nations stood at 0.9 percent over the allowable 135.5 million tonnes last year, compared to 0.8 percent the previous year.

 

EU agriculture spokesperson Michael Mann called milk overproduction a "persistent problem". In the last six years the minimal levy was EUR 135-million.

 

The Commission has said it would like to see the levy gradually phased out after 2014.

 

Only Spain and the Netherlands exceeded quota for direct sales to consumers, resulting in a levy of EUR 0.8 million.