The Department of Agriculture this week wrote to milk purchasers asking them if they wish to facilitate the payment of superlevy by individual milk producers in three yearly instalments. The Department has agreed in principle to grant such a facility.
The Department note suggests the scheme will run along the following lines:
1. An instalment scheme for the payment of the 2014/2015 superlevy will be introduced, with the legal backing of an appropriate statutory instrument.
2. Under this scheme, the Department, on receipt of a formal application from a milk producer wishing to participate, will raise a debt against that milk producer for the outstanding amount of super levy due and facilitate the payment over one or two subsequent annual instalments;
3. Milk producers wishing to avail of the scheme will be asked to apply through their milk purchaser;
4. The scheme will, at the outset, involve the establishment of a contract between the milk producer and the Department, where the value of the debt being raised and the conditions which must be complied with are set out;
5. A further contract will also be drawn up with each of the milk purchasers who have suppliers participating in the scheme. This will oblige the milk purchaser to collect the outstanding instalments within the required period, while the producer remains a supplier to that purchaser.
6. Other elements of the contract between the Department and the milk producer will include:
Allowing the milk producer pay individual amounts greater than the instalment value. Agreeing that the milk purchaser can deduct the debt from milk payments due over a period of months prior to the due date of the debt.If the payment is not made by the due date, the full value of the debt due on that date, with interest, will be deducted from subsequent Department payments due to the milk producer. If there is a change in the legal status of the milk producer (eg if it is incorporated into company status) or if the milk producer moves to another milk purchaser, the full debt raised falls due, unless new payment arrangements agreed by the Minister for Agriculture, Food and the Marine are put in place.The milk policy division is currently in discussion with the Department’s legal services division to finalise the legal framework to support the proposed scheme and has made an initial request to the Department of Public Expenditure and Reform (DPER) for sanction to pay the value of the uncollected instalments to the EU Commission as required. Once sanction has been received from DPER to the proposal, the scheme will be rolled out to the milk purchasers to communicate with interested suppliers.
Commenting on the information from the Department, IFA National Dairy Committee chair Sean O’Leary welcomed the issuing of basic legal provisions for the three-year superlevy payment scheme which ensure that the farmer’s superlevy debt is independent of which co-op they choose to supply over the next three years.
Details
The details of the scheme are to be set out in a statutory instrument.
“Some co-ops had feared that they may be left to pay the debt of a farmer leaving them or ceasing production. The notice of the scheme published this week makes it clear that this is not going to be the case. In essence, this will be a standalone scheme and there is therefore no justification for it to be linked in any way by co-ops to their Milk Supply Agreements,” Mr O’Leary said.
“However, numerous practical issues remain to be addressed by the Department of Agriculture as to what detailed payment arrangements will be open to farmers through their co-op, and this must be clarified urgently.”
The Department of Agriculture this week wrote to milk purchasers asking them if they wish to facilitate the payment of superlevy by individual milk producers in three yearly instalments. The Department has agreed in principle to grant such a facility.
The Department note suggests the scheme will run along the following lines:
1. An instalment scheme for the payment of the 2014/2015 superlevy will be introduced, with the legal backing of an appropriate statutory instrument.
2. Under this scheme, the Department, on receipt of a formal application from a milk producer wishing to participate, will raise a debt against that milk producer for the outstanding amount of super levy due and facilitate the payment over one or two subsequent annual instalments;
3. Milk producers wishing to avail of the scheme will be asked to apply through their milk purchaser;
4. The scheme will, at the outset, involve the establishment of a contract between the milk producer and the Department, where the value of the debt being raised and the conditions which must be complied with are set out;
5. A further contract will also be drawn up with each of the milk purchasers who have suppliers participating in the scheme. This will oblige the milk purchaser to collect the outstanding instalments within the required period, while the producer remains a supplier to that purchaser.
6. Other elements of the contract between the Department and the milk producer will include:
Allowing the milk producer pay individual amounts greater than the instalment value. Agreeing that the milk purchaser can deduct the debt from milk payments due over a period of months prior to the due date of the debt.If the payment is not made by the due date, the full value of the debt due on that date, with interest, will be deducted from subsequent Department payments due to the milk producer. If there is a change in the legal status of the milk producer (eg if it is incorporated into company status) or if the milk producer moves to another milk purchaser, the full debt raised falls due, unless new payment arrangements agreed by the Minister for Agriculture, Food and the Marine are put in place.The milk policy division is currently in discussion with the Department’s legal services division to finalise the legal framework to support the proposed scheme and has made an initial request to the Department of Public Expenditure and Reform (DPER) for sanction to pay the value of the uncollected instalments to the EU Commission as required. Once sanction has been received from DPER to the proposal, the scheme will be rolled out to the milk purchasers to communicate with interested suppliers.
Commenting on the information from the Department, IFA National Dairy Committee chair Sean O’Leary welcomed the issuing of basic legal provisions for the three-year superlevy payment scheme which ensure that the farmer’s superlevy debt is independent of which co-op they choose to supply over the next three years.
Details
The details of the scheme are to be set out in a statutory instrument.
“Some co-ops had feared that they may be left to pay the debt of a farmer leaving them or ceasing production. The notice of the scheme published this week makes it clear that this is not going to be the case. In essence, this will be a standalone scheme and there is therefore no justification for it to be linked in any way by co-ops to their Milk Supply Agreements,” Mr O’Leary said.
“However, numerous practical issues remain to be addressed by the Department of Agriculture as to what detailed payment arrangements will be open to farmers through their co-op, and this must be clarified urgently.”
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