Pressure on EU as seven states facing superlevies

Declan O'Brien

Declan O'Brien

Pressure is mounting on the EU Commission to alter its dairy policy after it emerged that seven member states are facing superlevy fines.

While just Holland, Denmark and Cyprus exceeded their national quota and had to pay fines last year, this number looks set to more than double this year.

A quarterly report on the EU dairy market showed that Austria, Belgium, Lithuania and possibly Ireland -- as well as the same three countries from last year -- look set to exceed their national quota at the end of this month.

There is mounting concern among some member states at the Commission's refusal to budge on the question of milk quota allocation or the level of superlevy fines.

Some countries, including Ireland, want national milk quotas increased by more than the 1pc annual increments agreed under the CAP health check. They have also sought a reduction in the superlevy fine which is currently set at 28.5c/l.

However, a Commission spokesman maintained that there were no plans to change the current EU dairy policy.

He explained that the latest estimates showed that 6pc of milk quota for the EU 27 would be underused.

Any moves to lower the level of the superlevy fine would be late for the 2011/12 milk quota year, the spokesman added.

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Meanwhile, there is growing unease among Irish dairy officials regarding the milk supply situation. The latest figures from the Department of Agriculture put Ireland at 0.93pc under quota, compared to 1.42pc under quota for the end of January.

The end of January figure was worse than was initially forecast. It had originally been estimated that supplies were running 1.88pc under.

With just 10 days left to the end of the quota year, dairy sources are divided on the likelihood of a superlevy fine.

At the moment, there are just four processors which are significantly under quota. Connacht Gold and Kerry are both 5pc under, while Lakesland Dairies is 4pc under and Town of Monaghan is 3pc under. Arrabawn is also under quota at the minute but the processor maintains it will be close to filling it by the end of the month.

With processors indicating that supplies are running 20pc ahead of normal for March, exceeding the national quota looks increasingly likely.

However, one dairy official insisted that a lot of the companies were exaggerating the extent of their oversupply in an attempt to put the brakes on farmers.

The amount of milk that is available through the National Reserve will also be critical.

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