September 21 is the expected application deadline for the first stage of the new EU milk reduction scheme.
According to IFA, the scheme offers four three-month periods of milk reduction, but the later three periods will not apply if the first period is oversubscribed and uses up the full budget of €150m.
The EU-wide scheme without individual member state allocations is “first-come, first-served”.
It will be up to each individual dairy farmer to decide whether he or she wants to apply for a payment for reducing production in October, November, and December, relative to the same period last year.
The obligation to reduce milk production relates to the three-month period, not the individual months.
There are limits to the reduction; it must be between 1,500 kgs (1,545 litres) and 50% of the reference period production in 2015.
The compensation is set at 14c/kg (14.4c/l) for every litre by which the farmer reduces production for the period October to December, 2016 (or either of the three later periods, if applicable), compared to the corresponding period in 2015.
The European Commission will accept all bids notified by member states within the agreed deadline — unless the claims exceed the volume (1.07 million tonnes) corresponding to the available budget, in which case a reduction co-efficient will be applied, which reduces the payment per litre.
No later than 45 days after the end of the reduction period, farmers will have to apply for payment, providing proof (such as milk statements) that production for the relevant three-month period was reduced as committed.
Late applications for payments will not be considered.
Farmers who have reduced production by less than committed will receive reduced payments, and no payment at all if the reduction was less than 20% of what was committed.
Payment must be made to eligible farmers within 90 days of the end of the reduction period.
The later periods in which a farmer applying must choose to reduce production are November, December, and January; December, January, and February; or January, February, and March.
Application deadlines for the later periods — if the scheme is not used up earlier — are expected to be on October 12, November 9, and December 7.
Applications under the scheme will be managed by the Department of Agriculture, and forms will be made available through co-ops within the next couple of weeks.
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