Superlevy fine to total €15m
THE latest estimate on milk supplies from the Department of Agriculture puts Ireland's oversupply at 0.94pc. This would the country's superlevy fine at around €15m.
A fine of around €20m had been forecast for the sector but the indications from industry sources are that this will now be around €5m lower.
Meanwhile, dairy processors have been accused of using interest rate differentials to profiteer on the back of the superlevy situation. The allegation comes after it emerged a six-fold difference exists between interest charged and credited by many co-ops.
Dairy processors have been withholding payments to suppliers that are over quota as a precautionary measure against any superlevy fines.
However, official calculations on superlevy charges are unlikely to be finalised before September, given that this was the case the last time a superlevy was applied in 2012.
The ICMSA estimates that up to €25m has been retained by dairy processors from farmers' milk cheques in recent months to cover super levy liabilities. Farmers are being paid 1pc on this money, but the same processors are charging an annual interest rate of 13pc on credit for on-farm input purchases.
Comparative rates for term loans from the main banks tend to be closer to 6-7pc interest at an annualised rate.
The ICMSA's deputy president, Pat McCormack, said it was not acceptable that dairy societies charged interest at a much higher rate than they were prepared to pay.