Levies for Milk Quota Overruns Total € 221 Million – European Commission

19/10/07 The levies for Member States exceeding their milk production quotas come to almost € 221 million for the 2006/07 marketing year, according to a provisional calculation by the European Commission, based on Member States' annual declarations. Last year the total levy amounted to € 355 million. Seven Member States (Austria, Cyprus, Denmark, Italy, Germany, Luxembourg, and Netherlands) exceeded their delivery quotas. Altogether these account for an overrun of 773,728 tonnes, resulting in a deliveries levy of € 220.82 million. Almost 80% of the total is due to excess production in Italy which exceeded its quota by 6%. Austria exceeded its quota by 3.3% but the other 5 countries who have incurred a levy were each less than 1% over quota. In relation to direct sales to consumers only Cyprus and Netherlands reported overruns, totalling 420 tonnes resulting in a levy on direct sales of € 120,000.

"Milk quotas have played an important role in the past in keeping supply and demand in balance," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "But since the CAP reforms came into effect, farmers are free to produce for the market and quotas are increasingly an anachronism. Quotas will disappear from 2015. The question we now have to ask is: what sort of transitional arrangements do we need? That will be a key topic in the upcoming CAP 'Health Check'."

For the 2006/07 season (April 2006-March 2007), the total quota for deliveries to dairies was 137 million tonnes. The quota is divided into 808 162 individual quotas for the whole of the European Union (EU-25 - The quota system was only implemented in Romania and Bulgaria from the 1st April 2007). There is a separate quota of 2 million tonnes for direct sales to consumers which is divided into 73 000 individual quotas.

The total levy to be paid is substantially (38%) lower in 2006/07 than in 2005/06 despite total adjusted deliveries decreasing by only 0.15%. This is because the total delivery quota was 1.2 million tonnes higher and the levy per kg of excess is 8% lower than in the previous year. Actual deliveries increased very slightly relative to 2005/06, but this was more than off set by a decrease in their average fat content (from 4.05% to 4.03%) thereby resulting in reduced deliveries after adjustment for fat content.

Producers in 18 of the EU 25 will not pay any levy in respect of deliveries because the national reference quantities have not been exceeded. Deliveries in 9 countries were at least 5% below quota (Greece, Sweden, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Malta and Hungary). However, in terms of the absolute amount of unused quota, France with 636,000 unused tonnes and the UK with 479,000 unused tonnes had the most significant under supply. The total unused deliveries quota in the 18 Member States which did not use all their quota amounts to 2.7 million tonnes. This means that, with the overruns in the other seven MS, the total milk deliveries in the EU 25 is actually 1.9 million tonnes under the total available quota.