EU Imposes Milk Over Production Levies

BRUSSELS - Oct 18/07 - SNS -- The European Union expects to fine member states almost Euros 221 million for exceeding their milk production quotas during the 2006-07 marketing year, down from Euros 355 million last year.

Seven Member States (Austria, Cyprus, Denmark, Italy, Germany, Luxembourg, and Netherlands) exceeded their delivery quotas. Altogether these account for an overrun of 773,728 metric tons (MT), resulting in a deliveries levy of Euros 220.82 million.

Almost 80% of the total is due to excess production in Italy which exceeded its quota by 6%. Austria exceeded its quota by 3.3% but the other 5 countries who have incurred a levy were each less than 1% over quota. In relation to direct sales to consumers only Cyprus and Netherlands reported overruns, totalling 420 MT resulting in a levy on direct sales of Euros 120,000.

"Milk quotas have played an important role in the past in keeping supply and demand in balance," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "But since the CAP reforms came into effect, farmers are free to produce for the market and quotas are increasingly an anachronism. Quotas will disappear from 2015. The question we now have to ask is: what sort of transitional arrangements do we need? That will be a key topic in the upcoming CAP 'Health Check'."

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