Milking the single payment system

UK - Farmers who boosted their 2005 single farm payment by investing in milk quota at the right time will see a 50 per cent increase in that part of the payment this year.
calendar icon 24 November 2006
clock icon 1 minute read
That can be seen as far-sighted financial astuteness by the few who read all the small print of common agricultural policy reform and realised that milk quota held on 31 March, 2005, could have a significant effect.

Or it can be seen as an appalling loophole in a European Union regulation which, legally, allowed some of those sharp enough to spot it to boost their single farm payments by several hundred thousand pounds. Last year the adjusted single farm payment addition based on milk quota held at 31 March, 2005, was 16.31 (£11) per tonne of milk.

For 2006, the payment is 24.5 per tonne. There is also a connected additional dairy payment which was worth 7.34 per tonne for 2005 and will be 11.01 for this year. These payments could push some of the big investors in quota past £1 million single farm payment for 2006.

For most farmers, their single farm payment is one annual subsidy based on, and replacing, the range of crop and livestock subsidies they received between 2000 and 2002. A different calculation and date for milk meant that as long as a business was producing some milk, it could buy or lease as much other quota as possible on which the premium would be paid.

Source: thescotsman.scotsman.com
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