Q&A: Milk reduction scheme
Applications to be sent in by Thursday, September 15.

One of the EU’s new measures for the dairy sector is a scheme to fund milk producers who voluntarily reduce production over a three-month period.

Its budget of €150m will reduce production by 1.1m tonnes.

Agriculture Minister, Michael Creed launched the scheme in Ireland last Friday, and next Thursday, September 15, is the closing date for farmers to return completed forms to their milk purchasers, if they want to apply for the EU voluntary milk-supply management scheme.

What happens if the scheme is over-subscribed?

If milk producers across the EU apply to reduce an amount in excess of what is covered by the aid budget, the EU commission will apply a ‘co-efficient’. 

This means that you will still receive 14c/kg on your reduction, but on a reduced percentage of your overall application volume. 

For example: If the total amount of aid sought across the EU is 10% over the allocated budget of €150m, you will receive a maximum of 14c/kg on 90% of your proposed reduction (on the basis that you meet the proposed reduction). 

If the budget ceiling is reached and a coefficient is applied in an application period, there will be no further application periods.

How soon will I know if the EU Commission will apply a coefficient?

The EU Commission will communicate the use, and value, of a coefficient within a number of days after the closing date for applications. Details will be made publically available, and will be published on the DAFM website, as soon as they are relayed.

If interested, how do I apply?

Application forms are available and will be processed through your milk cooperative/purchaser.

If interested, how soon do I need to apply?

Farmers interested in the scheme should apply via their cooperative/purchaser, not later than close of business on Thursday, September 15.

What are my eligibility requirements?

Applicants must have been supplying milk in the reference period (first reference period is October – December 2015-see below), and have been delivering milk to purchasers in July, 2016.

What is the reference period?

Aid shall be available to applicants reducing milk deliveries for a three-month period compared with the same period in the previous year, referred to as ‘the reference period’. 

The first reference period will be from October to December, 2015, inclusive. Your milk cooperative/purchaser will assist in verification of these details.

Is there a minimum and maximum milk reduction?

Minimum: Applicants will have to cover a reduction of at least 1,500 kilogrammes in a three-month period, which equates to 1,450 litres of milk. Maximum: Applicants may offer to reduce a maximum of 50% reduction of total deliveries, compared to the reference period.

Whilst aid is payable on the basis of kilogrammes of reduction, all applications can be made on the basis of litres. The Department will subsequently apply a standard conversion rate, as per the commission regulation of one litre of milk being equivalent to 1.03 kilogrammes of milk.

What if my actual reduction is less than the proposed reduction on my application form?

A number of scenarios are possible, depending on the level of actual reduction versus the initial, proposed reduction. The full amount of aid will be paid on the actual reduction, if it is not more than 20% below the proposed reduction. 

Aid will be paid on 80% of the actual reduction, if this is between 50% and 80% of the proposed reduction. Aid will be paid on 50% of the actual reduction, if this is between 20% and 50% of the proposed reduction. No aid will be paid if the gap between the proposed and actual reduction is more than 80%.

Can I apply for more than one application period?

To facilitate flexible usage of the scheme, it has been designed to accommodate a number of application periods: October – December 2016; November 2016 – January 2017; December 2016 – February 2017; and January – March 2017. 

Please note the previous point, regarding scope for the scheme to be discontinued, conceivably at any point after the first reference period, once the relevant financial and volume thresholds have been reached.

Applicants for aid shall not submit more than one application covering overlapping reduction periods. Where an applicant submits more than one concurrent application, none of his/her applications shall be admissible.

However, applicants who submit an application for the first reduction period (October – December 2016) may also submit an application for the fourth reduction period (January – March 2017), if the scheme is still running at that stage, as there is no overlap in these two periods.

What happens at the end of the reduction period?

Applicants have 45 days after the end of the reduction period to apply to the Department for payment. This application will be via a form that will be made available towards the end of the first production period (December 2016) and will again be done through their cooperative/purchaser.

Application for payment will be on the basis of actual reduction, subject to the terms outlined above, in respect to thresholds. The Department will process your application, and payment will be made within 90 days of the close of the reduction period.

I am part of a farm partnership. Can I apply?

Farm partnerships are entitled to apply for this scheme. It should be noted, for the purposes of this scheme, both farm partnerships and dual suppliers (see below) will be considered as ‘single production entities’.

Can I apply if I am a dual supplier?

A specific form is available for dual suppliers. This is a duplicated version of the single-supplier form. The two elements (one for each cooperative/purchaser) should be completed, verified, and dispatched to the Department separately, via each co-op/purchaser.


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