merrion street

The Department of Agriculture, Food and the Marine has announced the results of Phase 2 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 next to 31 January 2017. There were 556 applications from Irish dairy farmers for this phase with a total proposed reduction total of approximately 6.4 million litres. Across the EU there were applications for 98 million litres of reductions.

The significant subscription rate for Phase I of the scheme has meant that less than 1% of the overall budget is available for this Phase II. 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. An example of how this will be applied is if someone applied for 10,000 litres reduction in output, they will be compensated for reducing by 1,250 litres or 12.5% of this reduction. 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 for the scheme in the coming days to inform them of this result and authorising them to proceed with their reduction if they so wish.