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Stuart Agnew

Distribution of the Dairy Crisis targeted support payments

18th September 2015

Stuart Agnew MEP today welcomed the draft Commission delegated Regulation on the Dairy Crisis targeted support payments. 
“Fundamentally, the Commission’s decision to distribute the super levy money to farmers affected by the current dairy crisis means that British farmers are, on this occasion, not a net contributor to the EU’s coffers. This is money paid to the Commission by Member States that have flouted the old milk quota rules, which the UK was not guilty of. The money represents a bonus to UK agriculture for a change”. 
The draft Regulation gives Member States flexibility in determining how the 36.1m euro (roughly £26.5m) is to be distributed to British dairy farmers. “This flexibility is also to be welcomed”, said Mr Agnew. “However, the money should not discriminate against those who have secured a sustainable market position, such a supermarket aligned contract, and must not reward those who have expanded production without a confirmed market and thus contributed to the over-supply problem.” 
Given the complexity of the causes of the current dairy crisis and in order to meet the Commission’s requirements for the distribution of the money, UKIP believes that the money should be shared out equally between all dairy farmers at a flat rate per farm. The Commission made a similar payment to farmers following the milk price crash in 2009, when the bonus payment was paid out at the rate of 0.2p per litre produced on farm over the price-crash reference period. "Paying an amount per litre is effectively a production subsidy, rewarding those producing higher volumes more, and we do not believe that production subsidies can be justified”, explained Mr Agnew. “Dividing the pot equally between every registered dairy herd in the UK benefits the smaller herds as much as the bigger ones, and has the advantage of being the most straightforward option to administer. We strongly urge DEFRA to act as rapidly as possible to distribute the money to farmers on this basis”. 
1. Stuart Agnew MEP is a UKIP MEP for the Eastern Region and Agricultural Spokesman for UKIP. 
2. The current dairy crisis has been caused by an imbalance of supply and demand in milk supply internationally and at EU level. Demand side factors include the Russian embargo and lack of demand from China, whereas milk supply has increased dramatically in several Member States following the ending of the milk quota system in March 2015. Farm gate milk prices have reduced by as much as 20% in the last year as a result. 
3. Draft Commission delegated Regulation on the Dairy Crisis targeted support payments was discussed by the Commission expert group on the Common Market Organisation on Sept 17th 2015 and published in draft to MEPs on Sept 18th. 
4. The deadline for the distribution of the targeted support fund is 29 February 2016. 
5. Eight countries paid super levy fines as a result of overshooting quota in the 2013/14 milk year. Super levies for Germany, the Netherlands, Poland, Denmark, Austria, Ireland, Cyprus and Luxembourg totalled around €409 million. Around a third of this is attributed to the Netherlands. Fines are paid by individual farmers exceeding farm-held quota. 

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