Dairy farmers to be paid to reduce production

Published 6 September 16

Details on the €500m support package for dairy farmers were recently finalised by EU Member States, including how farmers can access the €150m worth of aid linked to reducing production.

  • Payments have been set at a rate of 14 eurocents (equivalent to 12ppl*) for every kg of reduced milk supply over a three-month period.
  • To be eligible for the payments, farmers must have been delivering milk to a buyer/processor in July 2016.
  • The first of four potential payment periods is from Oct- Dec 2016, with further chances to apply in 2017.
  • All bids will be accepted in the first period unless claims exceed the threshold of 1.07m tonnes. In this case, a reduction coefficient will be applied (ie each farmer will be paid for a portion of the 14c/kg reduction).
  • If the 1.07m tonnes is not reached, the scheme will be extended into future periods and new applications will be allowed.
  • Farmers can only apply for one three-month period.
  • Production must be reduced by a minimum of 1,500kg (1,457 litres) with payments capped at 50% of deliveries over the same period in the previous year.
  • At the end of the period, farmers must provide evidence of the actual reduction in milk deliveries within 45 days. Payments will be made within 90 days of the end of the reduction period.
  • Payment will be made on the actual reduction in deliveries, although if the drop in production is less than indicated on the application, deductions will apply. If the drop in milk deliveries is higher than planned, payments will be made on the planned reduction.

Within the UK, the scheme will be managed by the RPA. Application forms are expected to be available on its website sometime in the week beginning Monday 12 September. Farmers will only have until 21 September to apply for the payments, and will be required to submit evidence of last year’s production (ie. copy of milk cheques).

*based on average EUR/GBP exchange rate for August 2016