EU Supply Management Scheme: What do we know?

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The Milk Production Reduction Scheme is now open.

Click here for the RPA website which has full information, including the application form and guidance.

The first application deadline is Wednesday 21st September at 11am.

To recap, Commissioner Hogan announced a fund of €150 million to encourage dairy farmers to reduce milk production. In theory, farmers will be paid around 12ppl for every litre reduced milk supply over a three month period.

There are four chances to apply (October to December 2016; November 2016 to January 2017; December 2016 to February 2017 or January to March 2017). However, if too much volume is submitted in the first three month period there will be a reduction in the volume available for the three other tranches.

Who is eligible?

'Eligible applicants' are defined as milk producers who were delivering milk to processors in July 2016. So farmers who retired from dairying before July this year will not be eligible. Registered POs and co-operatives can also apply on behalf of their members.

When will applications open?

The Milk Production Reduction Scheme is now open.

Click here for full information about the Milk Production Reduction Scheme on the RPA website, including the application form and guidance.

When is the application deadline?

The deadline for submitting an application for the first period (October – December) is Wednesday 21st September at 11am. Given the very short timeframe, it will be important to fill in and post your application form as soon as possible.

Deadlines for the following periods will be two weeks before the start of the scheme.

Where will I get the application form?

Click here for full information about the Milk Production Reduction Scheme on the RPA website, including the application form and guidance.

How much can I claim for?

The minimum claim amount is 1,500kg or roughly 1,450 litres. There isn’t a maximum claim amount but there is a cap on the percentage you can apply for. If you plan to reduce by more than 50%, you will be capped at 50%. For example, if you are planning to go out of dairy and will reduce production by 100%, you will only be paid for 50%.

What will the application form ask for?

Click here for full information about the Milk Production Reduction Scheme on the RPA website, including the application form and guidance.

What will I need to submit with my application form?

For the initial application farmers will need to fill in and post a completed application form along with proof of production levels in 2015, for the months you are applying for this year. Alongside this they will also need to submit their milk cheque for July 2016, to show they are eligible. For example: Farmer A applies for October – December 2016. Farmer A will need to attach milk cheques for October, November and December 2015 and July 2016 with the application form. These do not need to be originals.

What happens if I don’t reduce production as much as anticipated?

The aid amount will cover the actual cow milk delivery reduction submitted by each eligible applicant, however there will be deductions if the reduction is less than forecast:

  • Where the actual milk delivery reduction is higher than forecast payment will be for the forecasted amount.
  • Where the actual milk delivery reduction is 50% or more but less than 80% of the quantity forecast, the aid amount shall be multiplied by a coefficient of 0.8.We understand this to mean farmers will be paid for 80% of the volume applied for.
  • Where the actual milk delivery reduction is 20% or more but less than 50% of the quantity forecast the aid amount shall be multiplied by a coefficient of 0.5. We understand this to mean farmers will be paid for 50% of the volume applied for.
  • Where the actual milk delivery reduction is less than 20% of the quantity forecast no aid shall be paid.

Can I apply for more than one three month period?

No farmers can only apply for one, three month period and this is a first come-first served scheme. If too much volume is submitted in the first three month period there may be a reduction in the volume available for the three other tranches.

The Commission will calculate the total volume put forward for each period and confirm volumes per farmer (before the start of each period). The price paid won't change, but the volume might.

How will the RPA/Commission know I have reduced production?

Following the end of your chosen three month period you will have 45 days to submit evidence to the RPA to show that you have reduced production.

E.g. Farmer A applies for the October – December period. Farmer A will need to submit milk cheques for October, November and December 2016 to the RPA by the 15 February.  

I have already retired in 2016. Will I be eligible?

To be eligible you need to have been producing milk in July 2016.

Can I be paid in €/£?

Defra is clarifying this.

If I want to apply how will I find out more?

Full information can be found here. The NFU is holding regular conference calls with the RPA and will keep members updates with any news. If you have any queries please send them through to the Dairy Team.


Last edited on: 10:09:2016

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