October 8, 2014

Eight EU countries slapped with milk surplus levies

Eight member states of the EU have exceeded their milk quotas for deliveries in 2013/2014, and must pay surplus levies amounting to about €409 million.

These countries include Germany, the Netherlands, Poland, Denmark, Austria, Ireland, Cyprus and Luxembourg.

According to national declarations for the year ended March 31, 2014, the eight countries exceeded their national quotas for delivery by a total of 1,469,000 tonnes.In addition, the Netherlands overshot its direct sales quota by 3,300 tonnes (4.2%) and faces an additional levy of €918,000.

Despite the overrun of these quotas, total EU deliveries remained 4.6% below the total quota volumes, compared with 6.0% in 2012/13. The number of member states exceeding their quotas remains limited and the concerned surplus production accounts for 1.0% of all milk delivered or covered by direct sales (0.1% in the previous milk quota year).

Some 20 member states remained under quota, of which 14 at more than 10% below their delivery quota.

The dairy quota system was introduced in the 1980s in order to address problems of surplus production. Each country has two quotas, one for dairies (97.6% of EU total), and the other for direct sales at farm level (2.4%).

These quantities are distributed among producers (individual quotas) in each member state. Where a member state exceeds its national quota, a surplus levy (often called "superlevy") of €27.83 per 100kg is charged.

Producers are made to pay the surplus levy. The amount of the levy is proportionate toa company's contribution to the overrun during the quota year (April 1 to March 31).

These figures are established after a redistribution of non-used quota of other producers.

The dairy quota regime will be abolished on April 1, 2015.