Policy Markets

Three Year Stagger Announced on EU Super-Levy Payments

EUROPE – Dairy farmers across Europe have more time to pay off levies charged for exceeding quota limits imposed on the 2014/15 quota year.

12 March 2015

2 minute read

Farmers can now meet their super levy in three interest-free instalments as they settle into milk production in a post-quota market place after an EU Commission proposal received the green light this week.

Member states are still required to pay due amounts by the normal date - end of November 2015. The Commission stressed the rule change relates to "individual producers."

The payments, due on October 1 2015, 2016 and 2017, provide “considerable flexibility” to farmers in cash-flow strife, said EU Agriculture Commissioner, Phil Hogan.

Farmer organisation, Copa-Cogeca, welcomed the announcement but said more was needed.

General Secretary Pekka Pesonen said it was “totally unacceptable” that money is leaving the sector through superlevy payments at a time when medium market indicators are so good for the dairy sector.

He described it as “a pity” that investment at farm level would be stopped due to an “administrative problem”.

“Hit by low prices, soaring input costs and a poor turnover, milk producers are facing severe economic difficulties, putting their cash flow at risk,” said Copa’s milk working party chairman, Mansel Raymond.

“Many producers – in around 13 member states - are also likely to pay a big milk superlevy bill this year.

“I therefore welcome the vote today in the EU management committee on the EU Commission proposal to help reduce the pressure by letting farmers pay the super levy bill over a longer period of time”.

UK levy board DairyCo said this would mean some of the UK's competor farmers “will be able to increase production quicker than if they had to pay superlevy in one lump sum.”

A DairyCo source said: “If a Member State decides to implement the staggered payment scheme, then it will be up to dairy processors to pay the instalments when they are due.

"The processor, in turn, can agree further payment plans with their producers if they so wish. Producers who want to pay their entire superlevy at once will still have the option to do so.”

According to the European Milk Board, the vote was clearly in favour with Sweden and the UK notably approving the move. Three countries - Bulgaria, Czech Republic and Slovakia voted against and Belgium, France and the Netherlands abstained.