Spreading superlevy bill over a number of years gaining traction in Europe – ICOS

The idea of spreading the 2014/15 superlevy bill over a number of years, at an interest free rate, first mooted by the Minster for Agriculture Simon Coveney prior to Christmas, has gained some traction in the European Commission.

According to ICOS, there currently is a legal examination of the proposal underway to see if it complies with state aid and competition law in the EU.

ICOS says it supports the initiative, but it can only form part of the solution to help farmers and their dairy co-operative businesses over what will be a difficult year for them in terms of cash flow and income.

ICOS highlights that the ending of dairy quotas has dominated the political agenda for some time and the recent weakening, of dairy markets, albeit from record highs, has made people nervous.

Meanwhile, Commissioner Hogan has been robust in his response saying that the sector is ‘not in state of crisis’ and that farmers should take their own action to reduce supply and superlevy fines.

ICOS notes that there remains strong lobbies on both sides of the dairy industry; some looking for the butterfat reduction that it has been long proposed, and some looking for new methods of supply management.

The result politically, it says, will likely end in stalemate, with the Commissioner and his DG Agriculture officials steadfastly saying that there will be no changes of any kind to the ending of the quota regime finally agreed in the 2008 CAP Health Check.

ICOS says as markets weaken as we move towards peak European supply, farmers should watch for possible moves around the rules governing Private Storage Aid and Intervention, and the spreading of the superlevy bill over a number of years.