The Dairy Produce Quotas Regulations 2005 (revoked)

Explanatory Note

(This note is not part of the Regulations)

These Regulations, which come into force on 31st March 2005, revoke and replace the Dairy Produce Quotas Regulations 2002 (S.I. 2002/457) (“the 2002 Regulations”) as amended by the Dairy Produce Quotas (Amendment) Regulations 2004 (S.I. 2004/312).

These Regulations implement Council Regulation (EC) No. 1788/2003 (OJ No. L279, 21.10.2003 p.123) establishing a levy in the milk and milk products sector (“the Council Regulation”) and Commission Regulation (EC) No. 595/2004 (OJ No. L94, 31.3.2004, p.22) laying down detailed rules for applying Council Regulation (EC) No 1788/2003 establishing a levy in the milk and milk products sector (“the Commission Regulation”). The Council Regulation and the Commission Regulation revoke and replace earlier legislation relating to the levy.

Under the Community legislation, as defined in regulation 2(1), a levy continues to be payable on dairy produce sold by direct sale by a producer or delivered by him wholesale to a dairy business, unless the sales or deliveries are within a reference quantity described in that legislation. The Community legislation establishes the system of what are commonly called “milk quotas” and in these Regulations the term “quota”, which is defined in regulation 2(1), is used to refer to the reference quantity described in the Community legislation.

These Regulations apply in relation to relevant persons, including producers and purchasers, in relation to whom the Secretary of State for Environment, Food and Rural Affairs (“the Secretary of State”) is the competent authority under the Dairy Produce Quotas (General Provisions) Regulations 2002 (S.I. 2002/458). The terms “relevant person”, “producer” and “purchaser” are defined in regulation 2(1). The Secretary of State is the competent authority in relation to those relevant persons whose trading address is in England. The holdings of producers to whom these Regulations apply may comprise land in parts of the United Kingdom outside England. Amendments to the Dairy Produce Quotas (General Provisions) Regulations 2002 also come into force on 31st March 2005; see S.I. 2005/466.

Apart from drafting changes and the revocation of spent provisions, the new provisions included in these Regulations are as follows:

(a)

Before approving a purchaser, the Secretary of State may oblige the purchaser to lodge such security as the Secretary of State may reasonably require (regulation 5(4)).

(b)

Provisions relating to butterfat-adjusted deliveries and the liability of producers for levy on deliveries (regulations 25 and 27).

(c)

A direct seller who does not provide a declaration of his sales in a quota year (as defined in regulation 2(1)) by 14^th May immediately following the end of that quota year and who is liable to pay levy in respect of such sales will pay levy at the full rate (regulation 30(14)).

(d)

Unless he has already paid levy, in certain circumstances a producer will be liable for the payment of levy to the Secretary of State where his purchaser has failed to do so (regulation 31).

(e)

Article 21 of the Commission Regulation requires that checks be made on the compatibility between deliveries and direct sales of milk on the one hand and production capacity on the other. Consequently, a producer is required to keep invoices of feed purchased by him (regulation 34(2) and paragraphs 2(1)(d) and 3(d) of Schedule 2).

(f)

Article 6 of the Commission Regulation provides that milk which is destroyed off-farm for sanitary reasons will not be taken into account when calculating levy. Consequently, a producer is required to keep records of such milk (regulation 34(2) and paragraphs 2(1)(j) and 3(k) of Schedule 2).

(g)

Where a person has to submit a document to the Secretary of State in accordance with these Regulations, the operative date is the date by when the Secretary of State receives the document, not the date of despatch to the Secretary of State.

(h)

New provision is also made—

(i)

enabling a tenant who buys quota to retain that quota at the end of his tenancy in certain circumstances (regulation 14);

(ii)

relating to the conversion of quota (regulation 22);

(iii)

to prevent the avoidance of levy (regulation 32);

(iv)

imposing a penalty for failure to submit a summary under Article 8(2) of the Commission Regulation by 1st July (regulation 36(6)); and

(v)

for the confiscation of quota (regulation 38).

A copy of the map referred to in the definition of “Scottish Islands area” is available for inspection at the offices of the Department for Environment, Food and Rural Affairs, Nobel House, 17 Smith Square, London SW1P 3JR.

A regulatory impact assessment of the effect which this instrument will have on the costs of business has been prepared and copies can be obtained from the Department for Environment, Food and Rural Affairs, Area 5d, 9 Millbank, c/o Nobel House, 17 Smith Square, London SW1P 3JR. A copy of the assessment has been placed in each House of Parliament.