The Department of Agriculture has announced the results of the second phase of the EU’s voluntary supply management scheme for the dairy sector.
This phase of the scheme covers reductions in the three-month period commencing 1 November 2016 to 31 January 2017. There were 556 applications from Irish dairy farmers for this phase, with a total proposed reduction total of approximately 6.4m litres. Across the EU, there were applications for 98m litres of reductions.
A total of 4,447 Irish dairy farmers applied to the first phase of the scheme, with a reduction of 74,225t of milk. In total, 52,101 farmers from across the European Union applied in the first phase.
Coefficient
The significant subscription rate for the first phase means that less than 1% of the overall budget is available for phase two.
As expected, this was not enough to cover the volume of applications received and so the European Commission has applied a coefficient of just under 0.125 to all applications.
This means that applicants for the scheme will only be compensated for 12.5% of the amount for which they applied. For example, if someone applied for 10,000 litres reduction in output, they will be compensated for reducing by 1,250 litres (12.5% of 10,000 litres). They may of course reduce by the full amount if they so wish but will not be compensated for anything above 12.5% of this amount.
The Department will be in touch with the applicants to the scheme in the coming days to inform them of this result and authorising them to proceed with their reduction if they so wish.