Minister of Agriculture Ivari Padar signed a Regulation providing that milk producers can pay the EU quota exceeding fine in three years. In the EU, milk production limitation by quotas will terminate on 31 March this year.
„Data of 11 months of the quota year 2014/2015 indicate that Estonia is likely to exceed its milk quota for deliveries by 1–2% and must therefore pay the fine totalling 1,9–3,8 million euros,“ Minister of Agriculture Ivari Padar said. „Considering the complicated market situation, milk producers can pay the fine for exceeding milk quota in three years, if they so wish.“
Padar explained that preliminary estimates of exceeding the milk quota for deliveries will become evident by the end of April and the final situation after the analysis of the received data during the first part of June. In case Estonia exceeds the national quota for deliveries, a surplus levy must be paid by the milk producers having exceeded their individual quotas. This levy will be deducted by milk purchasers after getting information about the levy deduction commitment from the Estonian Agricultural Registers and Information Board (ARIB).
The producers who have exceeded their individual milk production quota can apply for the payment of surplus levy by instalments interest-free within three years. The first instalment (at least 1/3 of the total levy) must be deducted by milk purchasers from the money to be paid for milk and transferred to the ARIB by 30 September 2015, the second instalment by 30 September 2016 and the third instalment by 30 September 2017.
Where the suplus levy is paid by instalments, milk producers do not have to pay any interest. Therefore, it is regarded as state aid by the European Commission and special rules apply here. For example, a security must be presented by milk producers.
In the EU, the milk quota system was introduced in 1984 in order to address the probleem of suplus production. In 2003, it was decided that the milk quota system will disappear in2015.
More information about the disappearance of milk quotas is available: