As detailed in many previous editions of this publication, ICOS has spearheaded practical lobbying in Brussels for the mitigation of the Superlevy bill.

Despite the promises of a ‘softlanding’ to the end of dairy quotas, and the continued technical possibility of a Butterfat adjustment, the political will of many countries and the Commission could not be found, with a qualified minority of countries, backed in the main by the UK and France at Council blocking our interventions.

In the middle of last year, as dairy markets began to weaken, Dairygold Co-operative acting on behalf of their farmer members issued a policy that they would help pay the superlevy in 2015, and allow penalised members pay them back in instalments, to help against a ‘perfect storm’ of falling prices, Russian ban, world oversupply, a big tax bill on 2014 profits, and capital investment around quota abolition.

Dairygold were the first in Europe to come up with this scheme, and other co-operatives in Ireland have looked at the proposals closely.

From an ICOS perspective, while the Dairygold action was welcomed and yet another clear example of the co-operative ethos at work, we felt that such a solution could be given a proper EU dimension.

This is especially true considering that:

1. A major element causing the dairy difficulty was a geopolitically caused Russian ban on dairy, sparked by EU sanctions which had nothing to do with producers.
2. That superlevy money to be collected, far exceeds what the EU has budgeted for under their 2015 accounts, and by EU law, will go into the general EU budget anyway and will not be retained for agriculture, much less for support for a beleaguered dairy sector.

It is abundantly clear that many ICOS member co-ops are supporting milk price above world market prices, and the imposition of them using their balance sheet to pay a superlevy bill on behalf of farmer members in 2015, will put yet another burden on their balance sheets, which ironically will affect their ability to raise milk prices as markets inevitably recover.

ICOS is fully cognisant that the EU has to adhere to quota and state aid law requirements, and that the Commission has been working for solutions in the area, in particular Phil Hogan and his staff personally.

But we feel that there has to be a mechanism, perhaps even through the drafting delegated acts, where the Commission while collecting the full value of superlevy and not affecting EU budget appropriations, can help spread the burden of superlevy payments over a longer period helping the cash flow problems of farmers suffering from geopolitical problems not of their making.

Making co-ops carry the financial strain of spreading the bill only weakens these farmer owned businesses. And using national governments to pay the bill is an obvious state aid contravention.

ICOS would see this as a fair and common sense approach.