The Dairy Produce Quotas Regulations 1994

Title and commencement

1.  These Regulations may be cited as the Dairy Produce Quotas Regulations 1994 and shall come into force on 1st April 1994.

Interpretation

2.—(1) In these Regulations, unless the context otherwise requires—

• “agricultural area” includes areas used for horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, areas of land used as grazing land, meadow land, osier land, market gardens and nursery grounds and areas of land used for woodlands where that use is ancillary to the farming of land for other agricultural purposes;

• “Commission Regulation” means Commission Regulation (EEC) No. 536/93(1), laying down detailed rules on the application of the levy on milk and milk products, as amended by Commission Regulation (EEC) No. 1756/93(2) fixing the operative events for the agricultural conversion rate applicable to milk and milk products and Commission Regulation (EEC) No. 470/94(3) amending Commission Regulation (EEC) No. 536/93 laying down detailed rules on the application of the additional levy on milk and milk products;

• “Community compensation scheme” means the scheme instituted by Council Regulation (EEC) No. 2187/93(4) providing for an offer of compensation to certain producers of milk and milk products temporarily prevented from carrying on their trade and Commission Regulation (EEC) No. 2648/93(5) laying down detailed rules for the application of Council Regulation (EEC) No. 2187/93;

• “Community legislation” means the legislation listed in Schedule 1;

• “consent or sole interest notice” means a notice, in relation to a holding or part of a holding, provided by the person required under these Regulations to provide the notice, and certifying—

  (a)

  either that he is the occupier of that holding or part of a holding and that no other person has an interest in that holding or part of the holding, or

  (b)

  that all persons having an interest in the holding or part of the holding the value of which interest might be reduced by the apportionment or prospective apportionment to which the notice relates agree to that apportionment or proposed prospective apportionment;

• “Council Regulation” means Council Regulation (EEC) No. 3950/92(6) establishing an additional levy in the milk and milk products sector, as amended by Council Regulation (EEC) No. 748/93(7) amending Regulation (EEC) No. 3950/92 establishing an additional levy in the milk and milk products sector, and Council Regulation (EEC) No. 1560/93(8) amending Regulation (EEC) No. 3950/92 establishing an additional levy in the milk and milk products sector;

• “Council Regulation 2055/93” means Council Regulation (EEC) No. 2055/93(9) allocating a special reference quantity to certain producers of milk and milk products;

• “cow” includes a heifer that has calved;

• “dairy enterprise” means an area stated by the occupier of that area to be run as a self-contained dairy produce business;

• “dairy produce” means the produce, expressed in kilograms or litres of milk (one kilogram being 0.971 litres), in respect of which levy is payable under the Community legislation;

• “Dairy Produce Quota Tribunal” has the meaning assigned to it by regulation 35;

• “delivery” has the meaning assigned to it by Article 9(g) of the Council Regulation (which sets out definitions) and “deliver” shall be construed accordingly;

• “direct sale” has the meaning assigned to it by Article 9(h) of the Council Regulation;

• “direct sales quota” means the quantity of dairy produce which may be sold by direct sale from a holding in a quota year without the direct seller in occupation of that holding being liable to pay levy;

• “direct seller” means a producer selling dairy produce by direct sale;

• “eligible heifer” means any heifer, which, at the date of service of the notice referred to in regulation 16(2)(b)(i), was on land subject to the notice and calves for the first time on a day when the notice has effect, or which at the date of making the order referred to in regulation 16(2)(b)(ii) was on land designated by the order and calves for the first time on a day when the order is in force;

• “holding” has the meaning assigned to it by Article 9(d) of the Council Regulation;

• “interest” includes the interest of a mortgagee or heritable creditor and a trustee, but does not include the interest of a beneficiary under a trust or settlement or, in Scotland, the estate of a superior;

• “Intervention Board” means the Intervention Board for Agricultural Produce established under section 6(1) of the European Communities Act 1972;

• “levy” means the levy, payable under the Community legislation to the competent authority referred to therein, described in Article 1 of the Council Regulation (which deals with the fixing of the levy);

• “Minister”, as regards anything in these Regulations relating to:

  (a)

  England and Wales, means the Minister of Agriculture, Fisheries and Food and the Secretary of State for Wales acting jointly;

  (b)

  Scotland, means the Secretary of State for Scotland;

  (c)

  Northern Ireland, shall be construed in accordance with paragraph (3); and

  (d)

  the United Kingdom, means the Ministers;

• “Ministers” means all those to whom the definition of “the Minister” relates, acting jointly;

• “national reserve” means the reserve described in regulation 14, constituted pursuant to Article 5 of the Council Regulation (which deals with confiscation and distribution of quota);

• “occupier” includes, in relation to land in respect of which there is no occupier, the person entitled to grant occupation of that land to another person;

• “producer” has the meaning assigned to it by Article 9(c) of the Council Regulation;

• “prospective apportionment” in relation to quota on a holding means apportionment of quota ascertained under regulation 11 which will take place if there is a change of occupation of a part of the holding to which the prospective apportionment relates within six months of that prospective apportionment;

• “purchaser” has the meaning assigned to it by Article 9(e) of the Council Regulation;

• “purchaser quota” means the quantity of dairy produce which may be delivered by wholesale delivery to a purchaser during a quota year without that purchaser being liable to pay levy;

• “purchaser special quota” means the quantity of dairy produce which may be delivered by wholesale deliveries against producers' special quotas to a purchaser during a quota year without that purchaser being liable to pay levy;

• “qualifying cow” means any eligible heifer which calves at a time when the number of eligible heifers exceeds the replacement number;

• “qualifying day” means, in respect of any qualifying cow, the day it calves and each day or part of a day thereafter during which the notice referred to in regulation 16(2)(b)(i) has effect or during which the order referred to in regulation 16(2)(b)(ii) is in force;

• “quota” means direct sales quota or wholesale quota, as the case may be;

• “quota year” means any of the periods of 12 months described in Article 1 of the Council Regulation (which deals with the fixing of the levy);

• “registered wholesale quota” means quota registered in accordance with regulation 25(2)(a);

• “replacement number” means the nearest integer to 22 per cent of the total number of dairy cows on the land subject to the notice referred to in regulation 16(2)(b)(i), or designated by the order referred to in regulation 16(2)(b)(ii), as at the date of service of the notice or (as the case may be) the coming into force of the order, and where 22 per cent of the total number is half way between two integers the nearest even integer shall be deemed to be the nearest integer;

• “requirements in relation to special quota” means—

  (a)

  the conditions for the award of special quota set out in—

  (i)

  Article 4(3) of the Council Regulation;

  (ii)

  Article 3a(1) and (2) of Council Regulation (EEC) No. 857/84(10) adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) 804/68 in the milk and milk products sector, as amended by Council Regulation No. 764/89(11) amending Regulation (EEC) No. 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No. 804/68 in the milk and milk products sector and Council Regulation (EEC) No. 1639/91(12) amending Regulation (EEC) No. 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No. 804/68 in the milk and milk products sector; and

  (iii)

  Article 1(1) of Council Regulation 2055/93; and

  (b)

  the restrictions on special quota set out in Articles 6(1) and 7(1)(a) of the Council Regulation, Articles 3a(4) of Council Regulation (EEC) No. 857/84 and Article 4 of Council Regulation 2055/93;

• “Scottish Islands area” means any one of—

  (a)

  the islands of Shetland;

  (b)

  the islands of Orkney;

  (c)

  the islands of Islay, Jura, Gigha, Arran, Bute, Great Cumbrae and Little Cumbrae and the Kintyre peninsula south of Tarbert; or

  (d)

  the islands in the Outer Hebrides and the Inner Hebrides other than those listed in (c);

• “special quota” means the quota referred to in Article 4(3) of the Council Regulation and in Article 1(1) of Council Regulation 2055/93;

• “the 1984 Regulations” means the Dairy Produce Quotas Regulations 1984(13);

• “total direct sales quota” means the total quantity of dairy produce which may be sold by direct sale from a holding in a quota year without the direct seller in occupation of that holding being liable to pay levy;

• “total wholesale quota” means the total quanitity of dairy produce which may be delivered by wholesale delivery from a holding in a quota year without the producer in occupation of that holding being liable to pay levy;

• “transferee”, means—

  (a)

  where quota is transferred with land, a person who replaces another person as occupier of a holding or part of a holding; and

  (b)

  in any other case, the transferee of quota;

• “transferor”, means—

  (a)

  where quota is transferred with land, a person who is replaced by another person as occupier of a holding or part of a holding; and

  (b)

  in any other case, the transferor of quota;

• “unused quota” means quota remaining unused after any direct sales or wholesale deliveries have been taken into account, adjusted in accordance with Article 2(2) of the Commission Regulation (which deals with the fat content of milk);

• “wholesale delivery” means delivery from a producer to a purchaser;

• “wholesale quota” means the quantity of dairy produce which may be delivered by wholesale delivery to a purchaser (to the extent specified in relation to that purchaser under these Regulations), from a holding in a quota year without the producer in occupation of that holding being liable to pay levy.

(2) In these Regulations, unless the context otherwise requires—

(a) any reference to a numbered regulation or Schedule shall be construed as a reference to the regulation or Schedule so numbered in these Regulations;

(b) any reference in a regulation or Schedule to a numbered paragraph shall be construed as a reference to the paragraph so numbered in that regulation or Schedule; and

(c) any reference in a paragraph to a numbered or lettered subparagraph shall be construed as a reference to the subparagraph so numbered or lettered in that paragraph.

(3) In their application to Northern Ireland these Regulations shall have effect with the substitution, for references to the Minister, of references to the Department of Agriculture for Northern Ireland.

Establishment of quota

3.  Total direct sales quota and total wholesale quota for any person and purchaser quota for any purchaser in respect of any quota year shall be established in accordance with these Regulations and the Community legislation.

Determination of levy

4.  For the purposes of Article 2(1) of the Council Regulation (which deals with the calculation of the levy), the contribution of producers who make wholesale deliveries towards the levy shall be established, in accordance with the provisions of that Article, at the level of the purchaser.

Milk equivalence of dairy produce

5.—(1) For the purposes of Article 1(2) of the Commission Regulation (which deals with milk equivalence of dairy produce) the milk equivalence of dairy produce shall be calculated on the basis that each kilogram of dairy produce shall equal such quantity of milk referred to in paragraph (2) as is required to make that kilogram of dairy produce.

(2) The milk to which paragraph (1) relates is milk the fat content of which has not been altered since milking.

Adjustment of purchaser quota

6.—(1) Where any wholesale quota is increased or reduced in accordance with the Community legislation or these Regulations, the purchaser quota of any purchaser to whom that quota is applicable shall be correspondingly increased or reduced.

(2) On any transaction to which the second subparagraph of Article 2(2) of the Council Regulation (which deals with replacements of purchasers and changes of purchasers by producers) applies, or on any permanent conversion of quota under regulation 18, any purchaser whose purchaser quota has been increased by virtue of such a transaction (other than as a result of a temporary transfer of quota under regulation 15) or such a conversion of quota shall submit to the Intervention Board—

(a) no later than 28 days after the date the transaction or conversion takes place, and in any event no later than seven working days after the end of the quota year in which such transaction or conversion of quota takes place, a statement setting out particulars of the transaction or conversion; and

(b) where appropriate, a declaration made and signed by the producer that the purchaser whose purchaser quota is to decrease has been notified of the particulars set out in the statement referred to in subparagraph (a).

(3) The statement referred to in paragraph (2)(a) and the declaration referred to in paragraph (2)(b) shall be made in such form as may from time to time be prescribed by the Intervention Board.

(4) Where during a quota year a producer changes from being registered with a purchaser to being registered with any other purchaser—

(a) for the purposes of calculation of levy liability under regulation 20 in that quota year, any purchaser with whom he is newly registered shall have his purchaser quota increased by an amount equivalent to such part of that producer’s registered wholesale quota as that producer shall determine;

(b) the amount of the increase of purchaser quota determined in accordance with subparagraph (a) shall not include the amount of quota necessary to cover the deliveries made by the producer before the date of the change of purchaser, adjusted if necessary in accordance with the second subparagraph of Article 2(2) of the Commission Regulation, and such amount of quota shall remain available to the original purchaser; and

(c) at the beginning of the quota year following the quota year referred to in subparagraph (a), the purchaser with whom the producer is newly registered shall have his purchaser quota increased by such part of the producer’s remaining registered wholesale quota as that producer shall determine.

(5) Where the amount of wholesale quota available to a producer changes as a result of a transfer of quota under regulation 7, 13 or 15, or as a result of a conversion of quota under regulation 18, that producer shall notify the purchaser with whom his wholesale quota is registered within seven working days of the change.

Transfer of quota with transfer of land

7.—(1) For the purposes of Article 7 of the Council Regulation (which deals with transfer of quota when any holding is sold, leased or transferred by inheritance), on a transfer of any holding or part of a holding, other than a transfer of a kind to which paragraph (6) or (7) refers, the transferee shall submit to the Intervention Board—

(a) no later than 28 days after the change of occupation of the holding or part of the holding, and in any event no later than seven working days after the end of the quota year in which the transfer takes place, a notice of transfer in a form from time to time prescribed for this purpose by the Intervention Board; and

(b) such other information relating to the transfer, and within such time, as the Intervention Board reasonably may require.

(2) The notice referred to in paragraph (1)(a) shall include—

(a) a statement, signed by the transferor and transferee, that they have agreed that the quota shall be apportioned taking account of the areas used for milk production as specified in the statement; and

(b) a consent or sole interest notice, provided by the transferor in respect of the entirety of the holding.

(3) Where a transferee fails to submit the notice referred to in paragraph (1)(a) no later than seven working days after the end of the quota year in which the transfer takes place, then for the purposes of any levy calculation—

(a) the unused quota transferred with such transfers shall not be treated as a part of that transferee’s quota entitlement for the quota year in which the transfer takes effect but shall be treated as if it remained unused quota available for reallocation by the Intervention Board in that quota year in accordance with paragraph 7 of Schedule 5; and

(b) that transferee shall not be entitled to demand that, by reason of such a transfer, an amendment be made to the amount of quota, if any, which has been reallocated to him under Schedule 5 for the quota year in which the transfer takes effect.

(4) Where there is a transfer of part of a holding—

(a) an apportionment of the quota relating to the holding shall be carried out in accordance with regulation 10; and

(b) any dairy produce which has been sold by direct sale or delivered by wholesale delivery from the holding during the quota year in which the change of occupation takes place and prior to that transfer shall be deemed, for the purposes of any levy calculation, to have been sold or delivered from each part of the holding in proportion to that apportionment, unless the parties agree otherwise.

(5) A prospective apportionment of quota in respect of a part of a holding may be made in accordance with regulation 11.

(6) No person shall transfer quota on a transfer of a holding or part of a holding in the following cases—

(a) the grant of—

(i) a licence to occupy land;

(ii) a tenancy of any land under which a holding, or part of a holding, in England and Wales is occupied for a period of less than ten months;

(iii) a lease of any land under which a holding, or part of a holding, in Scotland is occupied for a period of less than eight months;

(iv) a tenancy of any land under which a holding, or part of a holding, in Northern Ireland is occupied for a period of less than twelve months;

(b) the termination of a licence, tenancy or lease to which subparagraph (a) applies.

(7) No person shall transfer quota on a transfer of a holding or part of a holding where the transfer would result in an increase or reduction in the total direct sales quota or total wholesale quota available for use by dairy enterprises located within a Scottish Islands area.

Effect of land transfers on special quota

8.—(1) Subject to paragraphs (4) and (5), where a producer has special quota registered in his name and before the relevant date sells or leases the holding or a part of the holding—

(a) that special quota shall be returned to the national reserve if the holding is sold or leased by the producer; and

(b) a proportion of that special quota shall be returned to the national reserve if only part of the holding is sold or leased by the producer.

(2) In paragraph (1) “the relevant date” means—

(a) 1st July 1994 where the producer holds special quota of the kind referred to in Article 4(3) of the Council Regulation; and

(b) 1st October 1996 where the producer holds special quota of the kind referred to in Article 1(1) of Council Regulation 2055/93.

(3) The proportion of special quota which is to be returned to the national reserve in accordance with paragraph (1)(b) shall be the same proportion which the agricultural area of the holding sold or leased bears to the total agricultural area farmed by the producer.

(4) This regulation shall not apply where the transfer of the holding or any part of it is effected by means of the grant of one of the following—

(a) a licence to occupy land;

(b) a tenancy of any land under which a holding, or part of a holding, in England and Wales is occupied for a period of less than ten months;

(c) a lease of any land under which a holding, or part of a holding, in Scotland is occupied for a period of less than eight months; or

(d) a tenancy of any land under which a holding, or part of a holding, in Northern Ireland is occupied for a period of less than twelve months;

(5) No part of the special quota shall be returned to the national reserve where the holding or any part of it is transferred—

(a) on inheritance;

(b) by gift for which no consideration is given;

(c) by the granting of a tenancy following a direction under section 39 or section 53 of the Agricultural Holdings Act 1986(14) (direction for grant of tenancy to successor on death or retirement of previous tenant);

(d) by the granting of a tenancy (following a direction under section 39 of that Act) in circumstances within section 45(6) of that Act (new tenancy granted by agreement to persons entitled to tenancy under direction);

(e) by the granting of such a tenancy as is referred to in section 37(1)(b) or (2) of that Act (tenancy granted by agreement to close relatives); or

(f) by the granting of a tenancy other than under paragraphs (c), (d) or (e) of this paragraph by the landlord to a successor of a tenant who has died or retired,

and the person to whom the holding or any part of it is transferred undertakes to comply with the requirements in relation to special quota in accordance with the undertakings of his predecessor.

Notification of transfer of holding in relation to special quota

9.—(1) Subject to paragraph (2), where a producer has special quota registered in his name and intends to transfer the whole or a part of his holding before the relevant date referred to in regulation 8(2), he shall submit to the Intervention Board—

(a) at least 28 days before the transfer takes place, a notice of transfer in a form from time to time prescribed for this purpose by the Intervention Board; and

(b) such other evidence relating to the proposed transfer, and within such time, as the Intervention Board reasonably may require.

(2) Where a holding or part of a holding is transferred by means of any of the transactions referred to in regulation 8(5), regulation 7 shall apply.

Apportionment of quota

10.  Subject to regulations 8, 11(4) and 12, where there is a transfer of part of a holding, including part of a holding to which regulation 8(5) applies, the apportionment of the quota or special quota, relating to that holding shall be carried out:

(a) in accordance with the agreed apportionment set out in the notice referred to in regulation 7(1)(a), and in such a case that notice shall be submitted to the Intervention Board no later than 28 days after the transfer takes place;

(b) in any other case,

(i) in England and Wales and Northern Ireland, by arbitration in accordance with Schedules 2 and 4 respectively;

(ii) in Scotland, in accordance with Schedule 3.

Prospective apportionment of quota

11.—(1) The occupier of the holding in respect of which a prospective apportionment of quota is to be applied shall submit to the Intervention Board an application in a form from time to time prescribed for this purpose by the Intervention Board, requesting either:

(a) that a prospective apportionment of quota relating to the holding be made taking account of areas used for milk production as set out in the application; or

(b) that a prospective apportionment of quota be ascertained by arbitration in accordance with Schedule 2 in England and Wales, Schedule 4 in Northern Ireland, or in Scotland in accordance with Schedule 3.

(2) A request for a prospetive apportionment of quota may be revoked by a notice in writing to the Intervention Board, signed by the occupier of the holding to which the prospective apportionment relates.

(3) Where the occupier of a holding requests that a prospective apportionment be made in accordance with paragraph (1)(a), or gives notice of the revocation of such a request under paragraph (2), that request or notice shall be accompanied by a consent or sole interest notice in respect of the entirety of the holding.

(4) Where there is a change of occupation of part of a holding and within the six months preceding that change of occupation:

(a) the occupier of that holding has requested a prospective apportionment of quota in respect of that part of the holding and has submitted a notice in accordance with regulation 7(1)a, indicating that an apportionment of quota has been agreed; or

(b) a prospective apportionment of quota relating to that part of that holding has been made by virtue of Schedule 2, 3 or 4,

the apportionment of quota shall be carried out in accordance with:

(i) any prospective apportionment of quota relating to that part of that holding made under paragraph (1) and not revoked under paragraph (2);

(ii) if no such prospective apportionment has been made, any prospective apportionment which is in the process of being made under paragraph (1); or

(iii) in any other case, regulation 10.

Notification by the Intervention Board of apportionment of quota by arbitration

12.  Where the Intervention Board has reasonable grounds for believing:

(a) that the areas used for milk production on a holding are not as specified in a notice or application submitted for the purposes of regulation 7(1) or 11(1) respectively; or

(b) that the areas used for milk production on a holding were not as agreed between the parties at the time of apportionment nothwithstanding that no notice or application was submitted for the purposes of the aforementioned regulations,

it shall give notice of this fact to the person who submitted the notice or application, or in a case where no such notice or application was made, to the transferee, and in such case the apportionment or prospective apportionment of that quota shall be made:

(a) in England and Wales and Northern Ireland by arbitration in accordance with Schedules 2 and 4 respectively;

(b) in Scotland in accordance with Schedule 3.

Transfer of quota without transfer of land

13.—(1) For the purposes of the fifth indent of Article 8 of the Council Regulation (which permits the authorisation of a transfer of quota without transfer of the corresponding land, with the aim of improving the structure of milk production at the level of the holding), an application for transfer of quota without transfer of land, other than an application for a transfer of a kind to which paragraph (9) below refers, shall be submitted by the transferee to the Intervention Board for approval no later than ten working days before the intended date of such transfer, and that application shall be made in such form as may from time to time be prescribed for that purpose by the Intervention Board.

(2) The application referred to in paragraph (1) shall include—

(a) a statement, signed by the transferor and transferee, that they have agreed to the transfer of quota and explaining how the transfer is necessary to improve the structure of the business of the transferor and transferee;

(b) a consent or sole interest notice signed by the transferor in respect of the entirety of the holding from which the quota is to be transferred;

(c) an undertaking by the transferor that he—

(i) has not transferred quota onto his holding in accordance with the provisions of this regulation in the course of the quota year in which the application is made, or in the preceding quota year;

(ii) will not transfer quota onto his holding in the period between the date of the submission of the application and the end of the quota year following the quota year in which the transfer without land takes place;

(iii) will not, through his connection with or involvement in another business, seek to circumvent the restrictions at (i) and (ii) above; and

(d) an undertaking by the transferee that he—

(i) will not transfer quota from his holding in the period between the date of the submission of the application and the end of the quota year following the quota year in which the transfer without land takes effect; and

(ii) will not, through his connection with or involvement in another business, seek to circumvent the restriction at (i) above.

(3) The reference to the transfer of quota in subparagraphs (c)(ii) and (d)(i) of paragraph (2) shall include temporary transfer but exclude transfer on inheritance.

(4) Where it has received an application under paragraph (1), the Intervention Board may require that the transferor or transferee shall produce such other information relating to the application, and within such time, as the Intervention Board resonably may determine.

(5) Where the Intervention Board approves an application under paragraph (1), the transferee shall, no later than 28 days after the transfer takes place, and in any event no later than seven working days after the end of the quota year in which the transfer takes place, submit to the Intervention Board, in a form as shall be from time to time prescribed for that purpose by the Intervention Board, a statement of the amounts of used and unused quota available to the transferor and transferee on the date of the transfer.

(6) Where a transferee fails to submit a statement in accordance with the requirements of paragraph (5), the Intervention Board shall revoke its approval.

(7) Where an application to transfer quota without transfer of land has been approved by the Intervention Board, the Intervention Board may release a transferee from the undertaking referred to in subparagraph d(i) of paragraph (2), where the Intervention Board is satisfied that exceptional circumstances, resulting in a significant fall in milk production which could not have been avoided or foreseen by the transferee at the time of the submission of the application under paragraph (1), justify that release.

(8) The exceptional circumstances referred to in paragraph (7) are—

(a) the inability of the transferee to conduct his business over a prolonged period as a result of the onset of ill-health, injury or disability;

(b) a natural disaster seriously affecting the holding;

(c) the accidental destruction of buildings used for the purposes of milk production;

(d) without prejudice to subparagraph (e) below, an outbreak of illness or disease seriously affecting the dairy herd;

(e) the serving of a notice or the making of a declaration under an order made under section 17 of the Animal Health Act 1981(15) (in respect of places or areas in Great Britain) or the making of a declaration under an order made under article 12(1) of the Diseases of Animals (Northern Ireland) Order 1981(16) (in respect of places or areas in Northern Ireland) or the adoption of an emergency order under section 1 of the Food and Environment Protection Act 1985(17);

(f) the loss of a significant proportion of the forage area as a result of the compulsory purchase of the holding or part of the holding; and

(g) where the transferee is a tenant, the serving of an incontestable notice to quit under section 26 and Schedule 3 of the Agricultural Holdings Act 1986(17), dealing with the serving of incontestable notices to quit where the tenant is not at fault.

(9) The Intervention Board shall not approve an application for a transfer of quota without transfer of land where it is satisfied that the transfer would result in an increase or reduction in the total direct sales quota or total wholesale quota available for use by dairy enterprises located within a Scottish Islands area.

National reserve

14.—(1) The national reserve shall comprise such wholesale and direct sales quota as is not for the time being allocated to any person, including any quota withdrawn pursuant to regulation 33 or 34.

(2) The Minister may make allocations from the national reserve in accordance with the Community legislation and these Regulations.

Temporary transfer of quota

15.—(1) For the purposes of Article 6 of the Council Regulation (which deals with the temporary transfer of quota), a producer may agree with any other producer to make a temporary transfer, other than a temporary transfer of a kind to which paragraph (4) below refers, of all or part of any unused quota registered as his for a period of one quota year to that other producer.

(2) The Intervention Board may in respect of any quota year prescribe a reasonable charge in connection with the administration of temporary transfers of quota, and the prescribed charge per transfer shall be announced by such means as the Intervention Board considers likely to come to the attention of producers before the beginning of each quota year.

(3) Where there is an agreement to make a temporary transfer of quota under paragraph (1), the transferee shall submit a notice of the agreement to the Intervention Board in a form from time to time prescribed by the Intervention Board for this purpose, and the notice, accompanied by the charge prescribed in accordance with paragraph (2), shall be submitted to the Intervention Board no later than 15th December in the quota year in which the agreement is made.

(4) No producer shall agree with any other producer to make a temporary transfer of quota which would result in an increase or reduction in the total direct sales quota or total wholesale quota available for use by dairy enterprises located within a Scottish Islands area.

Temporary reallocation of quota

16.—(1) For the purposes of Article 2(4) of the Council Regulation and Article 5 of the Commission Regulation (which together deal with the reallocation of excess levy), the Intervention Board may, for any quota year, award to a producer referred to in paragraph (2) below a temporary reallocation of an amount of quota corresponding to a proportion of any levy collected in excess of the levy actually due in that year, in accordance with the provisions of this regulation.

(2) This regulation shall apply to—

(a) a producer who is affected by a formal acknowledgement of an error in the levy calculation, made pursuant to Article 5(1)(a) of the Commission Regulation, and

(b) a producer who has quota registered as his in relation to a holding which—

(i) is in whole or in part subject to a notice prohibiting or regulating the movement of dairy cows pursuant to an order made under the Animal Health Act 1981 or the Diseases of Animals (Northern Ireland) Order 1981, or

(ii) is situated wholly or partly within an area which at any time during that quota year has been designated by an emergency order under section 1 of the Food and Environment Protection Act 1985.

(3) Subject to paragraph (5) below, a producer referred to in paragraph (2)(b) above may be awarded a temporary reallocation of quota for any quota year in which the notice referred to in paragraph (2)(b)(i) or (as the case may be) the order referred to in paragraph (2)(b)(ii) has effect, and the amount of any such award shall be calculated either—

(a) as the amount equal to 15 litres per qualifying cow per qualifying day in any quota year; or

(b) as the amount by which in the quota year in question the producer’s production exceeds his quota entitlement,

whichever amount is less.

(4) Where the notice referred to in paragraph (2)(b)(i) or the order referred to in paragraph (2)(b)(ii) above continues beyond the quota year in respect of which a producer has received an award under paragraph (3), any award under that paragraph for the following quota year shall be calculated as if the number of the producer’s qualifying cows were equal to that of his eligible heifers which calved during the period of the notice in that following quota year, notwithstanding the fact that when any such heifers calved the number of eligible heifers did not exceed the replacement number.

(5) An award under paragraph (3) above shall not be available in the same quota year to a producer who transfers quota under regulations 7 or 13, makes a temporary transfer of quota under regulation 15, or purchases cows or in-calf heifers for dairy purposes, unless the Intervention Board is satisfied that the agreement to transfer, temporarily transfer or purchase, was entered into before service of the notice to which paragraph (2)(b)(i) above refers, or (as the case may be) before the coming into force of the order to which paragraph (2)(b)(ii) above refers.

(6) A producer referred to in paragraph (2)(a) above may be awarded a temporary reallocation of quota, for any quota year in respect of which the formal acknowledgement referred to in the Commission Regulation applies, which wholly or partially offsets the error in levy calculation to which the acknowledgement relates.

(7) In making any award of a temporary reallocation of unused quota for the purpose of this regulation the Intervention Board shall give priority to the producers referred to in paragraph (2)(a).

Special allocation of quota

17.  Where, by reason of a mistake made by the Minister or any person acting on his behalf, a person has not been allocated any quota or has been allocated a smaller quantity of any such quota than he would have been allocated if the mistake had not been made, the Minister may allocate to that person such quota as will compensate, in whole or in part, for that mistake from the national reserve.

Conversion of quota

18.—(1) Subject to the provisions of Article 4(2) of the Council Regulation (which deals with changes from direct sales to wholesale delivery and vice versa), the second subparagraph of Article 2(2) of the Council Regulation (which deals with replacements of purchasers) and this regulation, a producer may apply to convert, temporarily or permanently, direct sales quota for wholesale quota or wholesale quota for direct sales quota.

(2) Where a producer wishes to convert quota permanently or temporarily in any quota year, he shall submit to the Intervention Board an application in a form from time to time prescribed for that purpose by the Intervention Board and such application shall—

(a) state the amount (if any) of the producer’s direct sales quota, wholesale quota, direct sales and wholesale deliveries for the quota year in which the application is made, and the amount of unused quota which he holds at the time of the application and which he wishes the Intervention Board to convert; and

(b) include such other information as the Intervention Board may reasonably require in order to assess whether the requirements of Article 4(2) of the Council Regulation and Article 2 of the Commission Regulation are fulfilled.

(3) The application referred to in paragraph (2) above shall be made by the producer to the Intervention Board by—

(a) 31st December in any year in the case of permanent conversion of quota; or

(b) 28th April in any year following the end of the quota year in which the temporary conversion of quota takes place, in the case of temporary conversion of quota.

(4) Where a producer has permanently converted quota in any quota year, he shall not subsequently in that quota year transfer quota, whether temporarily or otherwise.

Representative fat content of milk

19.  A producer who in any quota year wishes to benefit from the negative correction provided for in article 2(1) subparagraph (e) of the Commission Regulation (which deals with the representative fat content of milk from certain new producers) shall before 1st March in that quota year confirm to the Intervention Board that in that quota year he has maintained in his dairy herd breeds of cow with characteristics similar to those in the herd in the first twelve months of production, and shall undertake to maintain such breeds in his dairy herd for the remainder of that quota year.

Reallocation of quota and calculation of levy liability

20.  Schedule 5 shall apply in respect of the reallocation of quota and the calculation of levy liability for the purposes of Article 2(1) of the Council Regulation (which deals with the calculation of the levy).

Prevention of avoidance of levy

21.—(1) Subject to subparagraph (2) below, where in any quota year a producer makes sales or deliveries of milk or milk products from milk produced by any cows and subsequently another producer makes sales or deliveries of milk or milk products from milk produced by any or all of the same cows, the second producer shall be deemed to have made those sales or deliveries in the capacity of agent for the first producer.

(2) Paragraph (1) above shall not apply where—

(a) an agreement has been entered into by the first producer for the sale or lease of the cows in question or the second producer has inherited them from the first producer; and

(b) the cows are kept on the second producer’s holding.

Payment of levy

22.—(1) For the purposes of Article 2(3) of the Council Regulation and Article 4 of the Commission Regulation (both of which deal with payment of levy by direct sellers), or Article 2(2) of the Council Regulation and Article 3 of the Commission Regulation (both of which deal with payment of levy by purchasers in respect of wholesale deliveries), levy shall be paid to the Intervention Board.

(2) Where any part of the levy remains unpaid after 1st September in any year, the Intervention Board may recover from the direct seller or (as the case may be) the purchaser the amount of the levy outstanding at that date together with interest in respect of each day thereafter until the said amount is recovered at the rate of one percentage point above the sterling three-month London interbank offered rate.

(3) For the purposes of the third subparagraph of Article 2(2) of the Council Regulation (which deals with set-off of levy liability), where a producer making wholesale deliveries to a purchaser exceeds his wholesale quota, adjusted, where appropriate, in accordance with Article 2(2) of the Commission Regulation, that purchaser may immediately deduct an amount corresponding to the amount of levy potentially payable by him in respect of the excess from the sums owed to the producer in respect of the deliveries.

Functions of the Intervention Board for Agricultural Produce

23.—(1) The Intervention Board shall be the competent authority for the purposes of Article 2(3) of the Council Regulation (which deals with payment of levy by direct sellers), and for the purposes of Articles 1, 3, 4 and 7 of the Commission Regulation (which together deal with matters relating to the assessment of levy and the payment of levy by direct sellers and purchasers).

(2) The Intervention Board may, in respect of—

(a) any person in whose name any direct sales quota is registered and who fails to submit to the Intervention Board before 15th May in any year the statement which is required to be made by Article 4(2) of the Commission Regulation; or

(b) any purchaser approved by the Intervention Board in accordance with Article 7 of the Commission Regulation and who fails to submit to the Intervention Board before 15th May in any year the statement which is required to be made by Article 3(2) of the Commission Regulation,

make and recover a reasonable charge in respect of any visit to any premises which the Intervention Board is reasonably required to make in order to obtain any such statement from any such person or purchaser.

Disapplication of enactments

24.  Nothing in section 47(2) of the Agricultural Marketing Act 1958(18) or Article 29 of the Agricultural Marketing (Northern Ireland) Order 1982(19) (which restrict the disclosure of certain information obtained under those enactments) shall restrict or apply to the disclosure of any information if, and in so far as, the disclosure is required or authorised by these Regulations or the Community legislation.

Registers to be prepared and maintained by the Intervention Board

25.—(1) The Intervention Board shall—

(a) prepare a direct sales register entry in respect of each direct seller setting out in particular—

(i) his name;

(ii) his address;

(iii) a reference number which serves to identify the direct seller;

(iv) the direct sales quota available to him for the quota year excluding the quota referred to in subparagraph (iv); and

(v) quota issued as special quota,

and shall send each direct seller a copy of the entry relating to him; and

(b) maintain—

(i) a direct sales register (being a register of entries referred to in paragraph (1)(a)), and

(ii) a register of particulars of direct sales by each direct seller.

(2) The Intervention Board shall—

(a) prepare a wholesale register entry in respect of each producer setting out in particular—

(i) his name;

(ii) his address;

(iii) a reference number which serves to identify the producer;

(iv) the wholesale quota available to him for the quota year excluding the quota referred to in subparagraph (v);

(v) quota issued as special quota;

(vi) a list:

• of the names and addresses of each purchaser whose purchaser quota will be calculated to take into account all or part of that producer’s total wholesale quota, and

• of the wholesale quota registered with each purchaser, showing the butterfat base of that quota calculated in accordance with Article 2 of the Commission Regulation,

and shall send to each producer a copy of the entry relating to him and to each purchaser named on the list referred to in subparagraph (vi) a copy of that part of the entry relating to his purchaser quota; and

(b) maintain a wholesale register (being a register of entries referred to in paragraph (2)(a)).

(3) In respect of each purchaser the Intervention Board shall:

(a) prepare a purchaser notice setting out:

(i) his name,

(ii) his purchaser quota,

(iii) his purchaser special quota.

and shall send each purchaser a copy of the notice relating to him; and

(b) maintain a register of purchaser notices.

(4) For the purposes of paragraphs (1) and (2) above, where a holding comprises more than one dairy enterprise, a direct seller or a producer may, on presenting to the Intervention Board a consent or sole interest notice in respect of that holding, agree with the Intervention Board the partition of that holding between separate direct sales register entries or wholesale register entries as specified in the agreement.

(5) The Intervention Board shall amend the registers which it is required by this regulation to maintain to record any allocations or adjustments made under or by virtue of these Regulations, or to make any correction which it reasonably considers to be necessary, and where it makes an amendment or correction shall notify any person affected by that amendment or correction.

(6) In this regulation “direct seller” and “producer” include a person who occupies land with quota whether or not that person is engaged in the sale or delivery of dairy produce.

Inspection of entries in the Intervention Board’s registers

26.  The Intervention Board shall permit, during reasonable working hours, inspection of any quota register entry relating to:

(a) a specific holding in the registers referred to in regulation 25(1)(b)(i) and 25(2)(b), by any person who is the direct seller or producer in relation to that holding, or who gives the Intervention Board a statement in writing that he has an interest in that holding; and

(b) a specific purchaser in the register referred to in regulation 25(3)(b), by the purchaser,

and shall, on payment of a reasonable charge, forward a copy of that entry to any such person who requests it.

Registration obligations of direct sellers, producers and purchasers

27.—(1) Each direct seller shall register his quota with the Intervention Board.

(2) Each producer who holds registered wholesale quota (including any producer who has temporarily ceased, or who intends temporarily to cease, making wholesale deliveries) shall register his quota with a purchaser.

(3) Each purchaser shall maintain, in respect of all producers whose register entries include that purchaser’s name on the list referred to in regulation 25(2)(a)(vi):

(a) a register as indicated in regulation 25(2)(b) in respect of that part of his purchaser quota attributable to each of those producers;

(b) a register of particulars of wholesale deliveries from each of those producers to that purchaser;

(c) the information required by Article 7 of the Commission Regulation (which deals with the records required in connection with levy assessment); and

(d) a system approved by the Intervention Board for sampling the milk of each producer and determining its fat content.

(4) Each purchaser shall amend the register referred to in paragraph (3) above on each occasion when, under these Regulations, the equivalent register maintained by the Intervention Board is required to be amended in relation to producers registered in that purchaser’s register.

(5) Each purchaser shall register with the Intervention Board and shall:

(a) comply with an undertaking given to the Intervention Board to abide by the provisions of these Regulations and the Community legislation;

(b) inform the Intervention Board of any factor or change in circumstance which affect that purchaser’s registration or its ability to comply with the undertaking referred to in subparagraph (a);

(c) confirm to each producer supplying that purchaser that the purchaser is registered and supply on request details of that registration; and

(d) notify each producer supplying that purchaser if that registration is rescinded.

Registers as evidence

28.  Any entry in a register or notice required by these Regulations to be maintained by the Intervention Board shall in any proceedings be evidence of the matters stated therein.

Information

29.—(1) Each purchaser shall provide such information to the Intervention Board as the Intervention Board reasonably may require in order to perform its functions under these Regulations and the Community legislation.

(2) Each purchaser shall submit to the Intervention Board on request, in a form from time to time to be determined by the Intervention Board, such statistics and forecasts relating to deliveries made or to be made to him, as reasonably may be required by the Intervention Board for the purpose of monitoring deliveries in relation to the total quantity for the United Kingdom referred to in Article 3(2) of the Council Regulation, and any such statistics shall be submitted within three working days of the end of the period to which the statistics relate, and any such forecast shall be submitted within 28 days of receipt by the purchaser of the request to provide such forecast.

(3) The Intervention Board shall copy such records to each purchaser as that purchaser reasonably may require for the purposes of his registration obligations under these Regulations and Article 3 of the Commission Regulation (which deals with the assessment and payment of levy).

Withholding or recovery of compensation

30.  Where a producer has submitted an application for compensation in accordance with the Community compensation scheme and it appears to the Minister that the producer has made a false or misleading statement in his application, or has failed to comply with any of the requirements of that scheme, the Minister may withhold or recover on demand from that producer the whole or any part of the compensation payable or paid to him.

Powers of entry and inspection in relation to special quota

31.—(1) Where a producer has special quota registered in his name or has applied to the Minister to have special quota allocated to him, he shall permit any officer duly authorised by the Minister, accompanied by such persons acting under his instructions as appear to that officer to be necessary for the purpose, at all reasonable times and on production of his authority on demand, to enter upon that producer’s holding in order to inspect any document, record or land (other than land used only as a dwelling) with a view to verifying—

(a) the accuracy of any particulars given in an application for special quota;

(b) compliance with the requirements in relation to special quota; or

(c) compliance with any of the undertakings referred to in regulation 8(5).

(2) A producer shall render all reasonable assistance to the authorised officer in relation to the matters mentioned in paragraph (1) above and in particular shall produce such document or record and supply such additional information relating to the allocation to him of special quota as that officer reasonably may require.

Penalties

32.—(1) Any person who—

(a) fails without reasonable excuse to comply with a requirement imposed on him by or under these Regulations or the Community legislation, or

(b) in connection with these Regulations or the Community legislation, makes a statement or uses a document which he knows to be false in a material particular or recklessly makes a statement or uses a document which is false in a material particular,

shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale or, on conviction on indictment, to a fine.

(2) The Minister may, following any conviction under paragraph (1)(b) against which there is no successful appeal, by notice served (within the period of 12 months following the date specified in paragraph (3)) on the person to whose quota that conviction relates reduce his quota to such extent as may reasonably be regarded by the Minister as being attributable to the falsehood on which the conviction was founded.

(3) The date referred to in paragraph (2) above is—

(a) in the case of a conviction against which there is no appeal, the date on which the right to appeal against that conviction expires; and

(b) in the case of a conviction against which there is an unsuccessful appeal—

(i) if there is no right of appeal against the result of that unsuccessful appeal, the date of that result; and

(ii) if there is a right of appeal against that result but no appeal is made, the date on which that right of appeal expires.

Confiscation and restoration of quota

33.—(1) Within forty-five days after the end of each quota year, each purchaser shall supply to the Intervention Board a list of those producers registered with that purchaser (whether for the whole or part of the quota year) who have not made deliveries to him during that year.

(2) Pursuant to Article 5 of the Council Regulation (which deals with the confiscation and restoration of quota), the Intervention Board shall notify—

(a) any producer who from information available to the Intervention Board appears not to have made deliveries or direct sales or a temporary transfer of quota under regulation 15 during the previous quota year, that his quota has been taken into the national reserve;

(b) any producer who is a direct seller and to whom Article 4(2) third subparagraph of the Commission Regulation (which deals with the late submission of declarations) applies, that unless that producer submits to the Intervention Board a declaration under the first sub-paragraph of Article 4(2) within 30 days of the date the notice is sent, his quota will be taken into the national reserve.

(3) Any quota withdrawn pursuant to Article 5 of the Council Regulation shall be placed in the national reserve with effect from the beginning of the quota year following the quota year for which the list referred to in paragraph (1) was supplied, the quota year for which the declaration indicating no direct sales was made, or the quota year for which no declaration was submitted, as the case may be.

(4) Any quota withdrawn pursuant to Article 5 of the Council Regulation may be restored to the producer in respect of the holding from which it was withdrawn within a period of six years from the beginning of the quota year in which it was withdrawn, in accordance with the provisions of this regulation.

(5) A producer who receives a notification of confiscation under paragraph (2) above shall—

(a) within 28 days of receipt of that notification notify any person with an interest in the holding of the content of that notification; and

(b) within six months of receipt of that notification, submit a notice to the Intervention Board, in a form from time to time prescribed by the Intervention Board for that purpose, indicating whether he wishes to retain the right to request restoration of the quota, and such notice shall include—

(i) a consent or sole interest notice in respect of the entirety of the holding;

(ii) a statement of the agreed apportionment of quota taking account of the areas used for milk production, signed by every person with an interest in the holding; or

(iii) a statement apportioning the quota in accordance with an arbitration under paragraphs 1(5), 3, 4 and 6 to 35 of Schedule 2 in respect of England and Wales, paragraphs 1, 2, 3(4) and 5 to 28 of Schedule 3 in respect of Scotland, and paragraphs 1, 2, 3(5), 5, 6, and 8 to 19 in respect of Northern Ireland.

(6) Where a producer has notified the Intervention Board under paragraph (5)(b) that he wishes to retain the right to restoration of quota, he may request the Intervention Board to restore to him the quota relating to that holding or part holding provided that the request is received by the Intervention Board at least six months before the end of the six-year period referred to in paragraph (4).

(7) Where a producer has notified the Intervention Board that he wishes to retain the right to restoration of quota and there is a change of occupation of all or part of the holding to which the quota relates, the new occupier may request the Intervention Board to restore to him the quota relating to that holding or part holding, provided that the request is received by the Intervention Board at least six months before the end of the six-year period referred to in paragraph (4) or within six months of the change of occupation, whichever is the earlier.

(8) Where quota is restored to part of a holding in respect of which an apportionment of quota has been made in accordance with paragraph (5)(b)(ii) or (iii), in accordance with a request made under paragraph (6), or following a change of occupation of part of a holding under paragraph (7), the amount of quota to be restored to that part shall be determined in accordance with—

(a) the apportionment referred to in (5)(b)(ii) or (iii) and within that apportionment in proportion to the agricultural areas concerned; or

(b) where no such apportionment has been carried out, in the same proportion which the agricultural area concerned bears to the total agricultural area of the holding from which quota was confiscated.

(9) Where a producer—

(a) fails to submit a notice in accordance with paragraph (5)(b);

(b) indicates on the notice submitted under paragraph (5)(b) that he does not wish to retain the right to restoration of quota;

(c) fails to request the restoration of quota in accordance with paragraphs (6) or (7);

(d) having had quota restored to him in accordance with paragraph (6), fails to make deliveries or direct sales of dairy produce from the holding to which the quota relates within six-months of his application for the restoration of quota or the end of the six-year period whichever is the earlier; or

(e) having had quota restored to him following a change of occupation referred to in paragraph (7), fails to make deliveries or direct sales of dairy produce from the holding within 18 months of the change of occupation or the end of the six-year period whichever is the earlier,

the relevant quota shall be taken into the national reserve.

Withdrawal of Special Quota

34.  Where a producer has special quota registered in his name and it appears to the Minister that the producer has made a false or misleading statement in his application for special quota, has failed to comply with the requirements in relation to special quota, or has failed to comply with any of the undertakings referred to in regulation 8(5), the Minister may withdraw the whole or any part of the special quota.

Dairy Produce Quota Tribunals

35.—(1) The Dairy Produce Quota Tribunal for England and Wales, the Dairy Produce Quota Tribunal for Scotland, and the Dairy Produce Quota Tribunal for Northern Ireland constituted under regulation 6 of the 1984 Regulations shall continue in existence and, in respect of a holding situated in more than one area of a Dairy Produce Quota Tribunal, the Dairy Produce Quota Tribunal the functions of which shall relate to that holding shall continue to be the Dairy Produce Quota Tribunal chosen for the purpose by the Ministers.

(2) Any reference in these Regulations to “The Tribunal” shall be treated as a reference to the appropriate Dairy Produce Quota Tribunal under paragraph (1).

(3) Schedule 6 shall apply in respect of the constitution, appointment of members, remuneration of members, staffing and procedure of Dairy Produce Quota Tribunals.

Revocation and saving

36.—(1) Subject to paragraph (2) below, the Dairy Produce Quotas Regulations 1993(20), the Dairy Produce Quotas (Amendment) Regulations 1993(21), and the Dairy Produce Quotas (Amendment) Regulations 1994(22), shall be revoked.

(2) Notwithstanding paragraph (1) above the Dairy Produce Quotas Regulations 1993 shall apply to the calculation of levy liability in respect of the 1993 to 1994 quota year.

In witness whereof the Official Seal of the Minister of Agriculture, Fisheries and Food is hereunto affixed on

L.S.

Gillian Shephard

Minister of Agriculture, Fisheries and Food

9th March 1994.

Hector Monro

Parliamentary Under Secretary of State, Scottish Office

9th March 1994