Farm Ireland

Friday 27 April 2018

Fast-track superlevy deal: IFA

Over quota suppliers are facing cashflow difficulties
Over quota suppliers are facing cashflow difficulties
Darragh McCullough

Darragh McCullough

Farmers have demanded fast-tracking of the three-year superlevy scheme to ease the 'intolerable' pressures on cash-flow for over quota suppliers.

Six-figure superlevy fines of up to €250,000 have emerged as the full extent of Ireland's €69m penalty hit home last week.

With only 5m litres in fleximilk available, suppliers to all but one co-op have been hit with bills averaging over €14,000 in some regions.

Town of Monaghan's suppliers were the only ones have been lucky enough to escape a superlevy this year, while both Lakeland Dairies and Kerry expect their over-quota suppliers to be hit with average fines of more than €14,000 each.

Within co-ops fines range from a few hundred euro to well over €100,000 per supplier.

Lakeland have informed category one suppliers with less than 350,000 litres of quota that they will benefit from up to 55,000 litres of fleximilk. Category two suppliers with quotas bigger than 350,000 received nearly 9,000 litres of fleximilk. They finished up 5.1pc, or 24.4m litres over quota, equating to fines of €6.9m spread across 480 suppliers.

While they have already paid farmers under quota any superlevy monies withheld, it has informed its over-quota suppliers that they will not be receiving any refund on superlevy deductions until contracts are signed with Department of Agriculture.

The IFA has since called on the Minister for Agriculture, Simon Coveney, to fast-track the implementation of the three-year superlevy payment scheme.

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"Some farmers have faced significant superlevy deductions in advance of the end of the quota year, and some of those may not have received any payment for their milk in several months," said the IFA's dairy chairman, Sean O'Leary.

"This is putting an intolerable pressure on their cash flow."

Glanbia has the biggest individual fine, with a superlevy bill of €23.5m litres for 119m litres. With over half of their suppliers over quota, fines are expected to average €9,500 per farmer. Farmers supplying less than 350,000 litres are entitled to fleximilk of 13,500 litres. Some 5,500 litres will be offered to those over 350,000 litres.

Dairygold finished the last quota year 55m litres over, which will result in fines of close to €16m for its suppliers. The redistribution of 22m litres of fleximilk within the co-op will see category one suppliers receive 12,000 litres each, while category two suppliers are set to get an additional 5,000 litres.

Kerry ended up 3pc or 28m litres over quota, incurring a superlevy charge of €8m. However, category one suppliers will not have any penalty levied against them courtesy of the 39m litres of fleximilk within the co-op. Category two suppliers also received 13,000 litres of fleximilk.

Connacht's Aurivo was also over quota by 3pc, or 5.5m litres. This equates to a superlevy fine of €1.57m, with 50pc of the co-op's 1,000 suppliers averaging penalties of €3,000 each.

Tipperary's 160 over-quota suppliers averaged a hefty €12,500 superlevy fine when the co-op finished 6.1pc, or 7.5m litres over. Category one suppliers are set to receive 26,500 litres of fleximilk, while category two suppliers will be allocated 7,500 litres.

Both West Cork co-ops of Barryroe and Drinagh were more than 4pc over quota, incurring fines of €850,000 and €2m respectively. Barryroe has allocated 11,000 litres of fleximilk to its category one suppliers, with just 3,000 litres for those in category two. Drinagh had 13,500 litres for its smaller suppliers, and 11,000 litres for farmers with quotas of more than 350,000 litres.

Midwest processor, Arrabawn ended up 7pc over quota, resulting in a superlevy of €4.7m, or fines averaging €9,500 per supplier.

Indo Farming