Dairy Reform Challenged By Euro Barrister
Defra's recently introduced dairy reform has been brought
in both unfairly and illegally with regard to the effect that it
will have on English dairy farmers, according to a leading Euro
The Opinion document was initiated through a campaign, led by
Charles Holt of the Farm Consultancy Group, to challenge Defra
on the unfairness of the dairy reform package in England. Mr Holt
has now written to all English dairy farmers who supported his
campaign and helped to raise the funding required to examine the
legal validity of the case by a Euro barrister.
On behalf of the campaign, solicitor William Neville of Burges
Salmon assessed the decision by Defra and considered that it may
be illegal and Defra may have a case to answer. The decision was
made to progress this with a Euro barrister.
“As the reform stands, dairy farmers in England will lose
about 6ppl in total over the next seven years,” says Mr Holt. “For
a dairy farmer producing 1 million litres a year this is a loss
of £60,000 compared with his Scottish, Welsh and Northern
Irish neighbours. Dairy farmers in the Severely Disadvantaged Areas
and Moorlands of England stand to lose even more.”
“The Opinion document I received last week supports our
case very strongly,” he adds. Issues lie in the framework
for reforming the support schemes under the CAP. At issue is the
relationship between two different payments - the 'Single
Payment', also known as the de-coupled payment, and the 'Dairy
Premium - based on the reference quantity (milk quota) available
to the holding on 31 March 2005 - and Additional Payment',
made each year.
The relevant EU regulation states that the Dairy Premium and Additional
Payment will be made in addition to the single payment up to 2006.
From 2007 the legislation envisages that the separate Dairy Premium
and Additional Premium will be included as part of the Single Payment
“This means that dairy farmers should receive a supplementary
payment in 2005 and 2006 based on the dairy premium and additional
payment,” says Mr Holt. “We have been informed that
this is exclusive to dairy farmers. There is no mechanism within
the regulation for withholding the money, nor for paying it to
other (non-dairy) farmers”
The barrister questions how the Dairy Premium and Additional Payment
will be dealt with under Defra's scheme of implementing the
Single Payment in England where they plan a gradual reduction of
payments initially based on historical entitlement, to be replaced
with increasing flat rate payments based simply on the eligible
In his view, it would be correct to pay the Dairy Premium and
Additional Payment on top of regionalised payments. He is also
of the opinion that these two payments constitute a specific legislative
regime, which is distinct from the Single Payment Scheme.
If the Dairy Premium and Additional Payment are not available
to English dairy farmers, but are available to dairy farmers in
other regions of the UK and elsewhere in the Community, English
dairy farmers will be placed at a competitive disadvantage.
Following advice from the barrister, Charles Holt has asked Burges
Salmon to forward the barrister's Opinion document to Defra. “We
would like Defra to confirm whether they intend to implement the
SPS in accordance with what we consider to be the correct approach,” he
says. “If not, then we require an explanation as to why they
consider a different approach to be permitted by the relevant legislation.
“And if we do not get a satisfactory response then we will
have to launch a full legal challenge. I understand this is likely
to take place in the European Court of Justice, due to the complexity
of the legislation.
“Defra appear to be reallocating half the funding - £500
to £600 million - destined for the Dairy Premium and Additional
Payment away from dairy farmers. In my view this is money that
should come to English dairy farmers,” adds Mr Holt.