Dairy producers will be able to voluntarily opt-in to a scheme for compensation to reduce their production, based on their own circumstances.
For every litre the farmer reduces their production by, compared to the same period last year, they will be paid around 12ppl, for each of the reduced litres.
NFU Scotland has been in discussions with the Scottish Government, seeking further clarity on how the scheme will work, whilst ensuring the scheme is up and running as quickly as possible.
Earlier this week, the European Commission announced a €500 million dairy package to assist the dairy industry.
€150 million of this fund will be allocated as an incentive to dairy producers across the European Union to reduce production and €350 million in national envelopes to member states.
It is understood that the UK is set to get just over €30 million, and the UK government will be able to ‘top-up’ this money by up to 100 per cent, if it chooses to do so.
A 'significant' scheme
NFU Scotland understands there will be four application windows for the supply management scheme, with only one application permitted per farmer. It is anticipated that all payments will be received by September 2017.
Any farmer can apply even if they are retiring or processing milk on their own holding.
Graeme Kilpatrick, NFU Scotland’s Dairy Committee Chairman, commented: "The fact that individual producers can decide to apply for the supply management money is significant.
"Dairy farmers will be able to make a choice, based on their own circumstances, as to whether the ‘compensation’ paid from the package to produce less milk than in a period of three months in 2015 is a better option than to produce at the processors’ price.
"On the national envelope the clarification we have received is that it will not be feasible to simply pay the money directly to farmers as was done the last time.
"This is disappointing. We are exploring with government the best way to spend this money to benefit the dairy industry."
