November 1, 2010

Three EU countries fined for exceeding milk quotas

Three EU member states - Denmark, the Netherlands and Cyprus - have been ordered to pay a total of EUR19 million (US$26 million) in fines for exceeding milk quotas in 2009/2010, according to provisional figures published by the European Commission.

The total is comparatively low compared to previous years; last year superlevy fines were EUR99 million (EUR138 million) and in the previous year they added up to EUR340 million (US$475 million).

The Netherlands and Denmark exceeded their 'deliveries' quota by 0.4%, and Cyprus by 0.3%, triggering fines of EUR13.03 million (US$18.22 million), EUR5.68 million (US$7.94 million) and EUR125,000 (US$175,000) respectively.

The deliveries quota refers deliveries to dairies and is distinguished from the direct sales quota that covers products sold straight to consumers. Only the Netherlands overran the direct sales quota, and so faces an additional levy of EUR631,000 (US$882,000).

For the first time since the increase in quotas agreed under the 2008 CAP Health Check, Italian production finished within quota.

Global EU production finished some 7% below global quota volumes. This partially reflected the difficult market situation.

Unsteady global demand led to a reduction of global deliveries of 0.6% and in 11 member states the drop was more than 2%.

"The 2009/2010 quota year will be remembered for the particularly difficult market situation witnessed in so many member states," said EU agriculture Commissioner Dacian CioloÅŸ.

However, he is optimistic his proposals, to be presented in December, will enable producers to respond better to market changes and offer more stability as the quota system draws to an end in 2015.