EU Dairy Crisis Fund – the €420 million targeted aid
The EU perspective
The Commission has made available €420 million for Member States in order to support farmers in sectors which have been hit hardest by the current market situation. Member States have flexibility to decide how to target this support on the basis of objective and non-discriminatory criteria, and must inform the Commission of their intentions by the end of December 2015. Allocations to Member States are based on production in the last milk quota year ( April 2014- March 15), with additional amounts to reflect those with extremely low prices, those more affected by the Russian embargo, and further amounts reflecting feed crop problems related to drought. Under budgetary rules, Member States need to pay out these funds to their farmers before the end of June 2016.
This is a Delegated Regulation which was adopted by the European Commission on October 15th, published in the Official Journal on October 16th and came into force on October 17th.
UK perspective
The UK had the third largest national envelope, after Germany and France. This overall package of £26.2 million will be shared with the devolved regions as follows:
Devolved region | Value |
England | £15.5 million |
Scotland | £2.3 million |
Northern Ireland | £5.1 million |
Wales | £3.2 million |
The payments in England and Wales will vary per farmer and be based on a flat rate per litre of milk production in 2014-15. The average payment is expected to be around £1,820 and will be administered by the Rural Payments Authority.
Questions and answers:
Under what regulation can these payments be made?
Regulation EU 2015/1853 was agreed on October 15th 2015. The RPA now need to put in place a Statutory Instrument to cover payments as they are not covered in domestic legislation.
Who will administer the payments?
Last Friday agreement was reached that payments across all the UK devolved regions would be handled by the RPA. The RPA have received returns for the last quota year (2014/15). They also hold individual production returns for UK producers (c13,000 records) and records of direct sales producers (around 300 in England). The RPA will marry up the processor records with producer records so that individual farmers will be paid accurately.
How will payments be made?
The RPA is looking to pay out the monies as quickly as possible via the least burdensome approach possible for them. The RPA may need to check some bank details prior to payment if quota holder information does not match SPS payment information.
Payments will vary per farm and are based on a flat rate per litre figure multiplied by the milk production figure for the 2014/15 milk year.
What about farmers that ceased production during the last milk year?
Producers that have increased /decreased production since this reference period or ceased production entirely within the reference period will see amount they are paid reduce accordingly. DEFRA estimate the average payment to be £1,820. Payments will be made to those who have ceased production during the milk year or since then.
When will payment be made?
RPA have not confirmed this to us, but are having to factor the timing of payments around ongoing development of BPS payment capability within the finance element of the organisation. RPA would like to release monies as soon as they can and most payments within a bulk release. This is likely to be in early December.
What are RPA doing at the moment?
The RPA are working with the devolved administrations in collecting information on dairy producer details. They need to ensure they have the accurate bank details for all dairy farmers.
What about farmers not registered on Rural Payments online (or in devolved regions)
Farmers will not be paid their dairy fund money until they are registered with the RPA. There are currently around 2,500 unregistered BPS claimants many of which may be dairy farmers. If you are not registered with the RPA please contact them urgently.
Will all payments made at once?
In principle most dairy fund monies will be paid on the same day. There may be a requirement for a series of payment runs as the RPA does want to hold up payments for everyone due to incomplete details for a few farmers.
Is the EU crisis fund only for dairy cattle farmers?
The fund will be paid out only to those milk producers within the former milk quota regime. The RPA confirmed monies not going to goat or sheep milk producers.
Can payment be made in Euro?
Some milk producers have opted to receive their BPS monies in euros. The NFU have queried whether these farmers can receive the dairy fund in euros. The RPA is checking whether this can be done.