Milk hold-over could cut levy fine by €12m

Caitriona Murphy

Last-gasp attempts by dairy farmers to hold back milk supplies over the weekend have the potential to reduce the country's superlevy bill from €23m to closer to €11m.

By Wednesday, Ireland was on course to finish the 2011/2012 quota year 80m litres over quota, according to ICOS quota expert George Kearns. This would translate into a fine of €22.8m.

Describing the figure as a worst case scenario, Mr Kearns said a massive hold-over of milk on farms in the final days of the quota year was the only way to reduce the superlevy bill.

With daily milk supplies during March averaging 13.6m litres, a nationwide hold-over of milk on farms for three days could, in theory, reduce the over-quota position by up to 40m litres.

However, Mr Kearns warned that such a large clawback was next to impossible.

"There is a limit to what can be achieved from holding back supplies," he said.

"It was down to the 18,000 individual suppliers' positions and their co-ops' positions.

"Farmers who were under quota expected to have their milk collected as normal, while even some over-quota farmers wanted to supply their milk regardless," he added.

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Nonetheless, over-quota farmers in Glanbia, Dairygold, Wexford and Tipperary were expected to hold back considerable amounts of milk over the weekend.

Over-quota Dairygold suppliers were expected to store two to three days of milk -- up to 3.5m litres -- on farms until Sunday morning.

A spokesman for Wexford said the co-op was budgeting for 400,000l -- equivalent to three days' supply -- to be held on farms up to midnight on Saturday, while over-quota Tipperary suppliers were also stalling milk deliveries.

Glanbia farmers held back around 2m litres over the weekend but the latest estimate from the dairy processor shows it finished at 51m litres (4.4pc) over quota.

Premier Dairies finished 3.5m litres (1.2pc) over quota.

A spokesman for Lakeland Dairies said that while the co-op could finish very slightly over quota, the fleximilk allocation would bring it on quota.

Chief executive Michael Hanley complimented Lakeland suppliers on their "excellent quota management in recent months".

Meanwhile, the ICMSA has called on the Department of Agriculture and dairy processors to speed up the processing of milk supply data and make the fleximilk allocations to farmers as soon as possible.

"Many farmers have not seen a milk cheque since last autumn with the consequent impact on cashflow," said ICMSA dairy chairman Pat McCormack.

"We think it's essential that farmers get their fleximilk allocations as soon as possible to release whatever payments will be available."

He added that for farmers facing a superlevy fine, it was essential that their processors and banks worked in co-operation with them.

His comments were echoed by IFA dairy chairman Kevin Kiersey, who said banks must be receptive to their over-quota dairy farmer clients and work with them to facilitate superlevy bill payments.

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