EU fines nine for dairy quota infringements

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Nine EU member states will pay a total of €388 million in fines
this year for milk quota overruns, nearly €70 million more than in

Under the complicated EU quota system, each member country is given two 'reference quantities' or quotas for cow's milk, one for deliveries to dairies, the other for direct sales to consumers. Each milk producer in every member state is given an individual quota, and is fined €0.35627 for every kilogramme produced in excess of this quota.

For the 2003/04 marketing year, which ran from April to March, the total quota for deliveries to dairies was set at 117.78 million tonnes, divided into 529,000 individual producer quotas, while the quota for direct sales to consumers was set at 1.2 million tonnes.

In a statement this week, the European Commission said that Austria, Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, the Netherlands and the UK had all exceeded their quotas for deliveries to dairies, producing a combined 1.08 million tonnes more than the quota figure and thus incurring a charge of €384 million.

The other six member states (France, Greece, Spain, Portugal, Finland and Sweden) did not use up their quotas, the Commission said, producing some 546,000 tonnes less than they were allowed.

Thus, total excess milk production in the EU last year was 532,000 tonnes.

As far as direct deliveries to consumers are concerned, the UK, the Netherlands and Luxembourg exceeded their quotas to the tune of 11,399 tonnes, resulting in a levy of €4.1 million.

Germany has the largest quota for dairy deliveries, 27.7 million tonnes, because it has the biggest number of active dairy producers in the EU15 (117,456 last year). The country was also one of the worst offenders when it came to exceeding the quota - its producers overran by 369,937 tonnes in 2003/04, incurring fines of €131.8 million - almost a third of the total fine - as a result.

Italy was the biggest offender, though, with excess production of 468,501 tonnes, resulting in a levy of €166.9 million. Austria and Denmark were the only other countries to incur levies in double figures (€31.3 million and €12.1 million respectively), although the fine will hit Danish producers the hardest, as it must be shared between just 7,349 active producers. Only Spain and Luxembourg have fewer processors in the EU15.

Spain and Portugal headed the list of under-users - Spanish production fell some 83,682 tonnes short of quota, while in Portugal it was 47,617 tonnes below the maximum permitted level.

France has the biggest quota for direct sales to consumers - 335,098 tonnes - but fell well short of this level in 2003, producing just 279,670 tonnes of milk for sale through this channel. The UK was the worst offender, producing some 8,704 tonnes more than its quota of 180,862 tonnes of milk for sale directly to consumers, thereby incurring a levy of €3,101, three-quarters of the total fine.

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