Cyprus Fined for Exceeding EU Milk Quota

The EU has levied a 97 million euro fine on Cyprus, Austria, Italy, Luxembourg and the Netherlands for exceeding their 2008/2009 milk delivery quotas, said the EU today.

Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, said: "Despite the increase in quotas in 2008/09, production was almost unchanged from the year before. However, prices were much lower. With output more than 4 percent below quota, it is clear that the low farm gate prices over the past few months have nothing to do with the gradual phase-out of the quota system."

Producers in 22 of the 27 Member States will not pay any levy in respect of deliveries because the national quotas have not been exceeded. In fact, deliveries in 13 countries were at least 5 percent below quota (United Kingdom, Slovakia, Finland, Estonia, Latvia, Greece, Hungary, Sweden, Slovenia, Bulgaria, Lithuania, Malta and Romania).

How the system works

Cow's milk is marketed in the European Union on the basis of quotas. Each Member State has two quotas, one for deliveries to dairies, the other for direct sales to consumers.

These quantities are broken down among producers (individual quotas) in each Member State. Where there is an overrun in the national quota, a levy is payable in the Member State concerned by the producers who have contributed to the overrun. This surplus levy has to be paid by producers of cow's milk on all quantities of milk or milk equivalent in excess of the quota marketed during a 12-month period, which runs from 1 April to 31 March. Each year before 1 September, the Member States must report to the Commission on the results of the application of the milk quota scheme over the previous period. This notification must be in the form of a completed questionnaire containing all the data needed to calculate the surplus levy. The rate of the surplus levy is € 27.83/100kg of overrun.