Drop in the delivery quotas highlights the delicate situation of EU dairy market

According to preliminary data published by the European Commission, only three Member states have exceeded their milk quotas in the 2009/2010 quota year. For that reason the superlevy fines have dropped to 19 million Euro, comparing to 99 million in the previous campaign. This reduction is due in a great part to the increase in quotas agreed in 2008.

Global deliveries in the 2009/10 milk campaign were down 0.6%, reflecting the difficult milk market situation in Europe, with a decrease of more than 2% in 11 Member States (Czech Republic, Estonia, Ireland, Greece, France, Latvia, Lithuania, Hungary, Romania, Slovakia and Sweden). After fat correction, deliveries in 15 Member States (Bulgaria, Czech Republic, Estonia, Ireland, Greece, Latvia, Lithuania, Hungary, Malta, Romania, Slovenia, Slovakia, Finland, Sweden and United Kingdom) were at least 10% below their national quota.

According to these preliminary data, in 2009/10 campaign only the Netherlands, Denmark and Cyprus exceeded their delivery quotas and are therefore faced to the payment of superlevy fines. Altogether these three countries accounted for an overrun of 70,000 tonnes of their national quotas.

Superlevy fines for the 2009/10 EU milk campaign

  • The Netherlands: exceeded delivery quota by 0.4%, fine of 13,03 M€. Also overran its direct sales quota by some 2,268 tonnes, resulting in a further levy on direct sales of 631,000.
  • Denmark: exceeded delivery quota by 0.4%, fine of 5.68 M€
  • Cyprus: exceeded delivery quota by 0.3%, fine of 125,000 €

Based on Member State annual declarations, all other 24 Member States were within their quotas. Although decisions in 2008 (quota increase and changes in the fat correction system) increased the scope for production considerably in 2009/2010, an increase in deliveries was only registered in 10 Member States (Belgium, Bulgaria, Denmark, Germany, Spain, Luxemburg, Malta, the Netherlands, Austria and Finland).

In fact, after the increase in quotas agreed under the 2008 CAP Health Check, Italian production finished within quota for the first time, as global EU production finished some 7% below global quota volumes, compared with the 4.2% margin in the 2008/09 quota year (April-March).

Quota system in EU milk market

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 one for direct sales to consumers. These quantities are broken down among producers (individual quotas) in each Member State. For the 2009/2010 quota year (April 2009-March 2010), the total quota for deliveries to dairies was 144.8 million tonnes, divided into 836,000 individual quotas. The separate direct sales quota of 3.5 million tonnes is divided into nearly 370,000 individual quotas.

Where there is an overrun in the national quota, a surplus levy , or "superlevy", is payable in the Member State concerned by the producers who have contributed to the overrun, at a rate of € 27.83 per 100kg of overrun.