Milk Production under Production/Share Farming Agreements
Where more than one herd is to be milked on the same holding with production recorded against quota held under separate producer registrations, it needs to be clearly demonstrated that the production is from separate herds. In such arrangements, therefore, we would expect the cows to be clearly identifiable to each herd, kept in separate and distinct areas, milked separately and the milk stored and recorded separately.
An arrangement whereby Farmers A & B form a new company or partnership, that holds all quota jointly and is the "producer" farming the holding is likely to be acceptable.
An arrangement whereby Farmer B becomes the tenant of Farmer A, and has all milk quota registered under his own trader registration number, is likely to be acceptable.
Many share-farming agreements, where the quota is retained under two separate quota register entries, would not be acceptable under the current legislation as they would not be a situation where either two separate producers are farming two separate holdings, or where one producer has two separate dairy enterprises.
Arrangements whereby deliveries of milk are recorded against one registration number for part of the year, and then against a different number for the remainder of the year are unlikely to comply with Regulation 32 of the Dairy Produce Quotas Regulations 2005 as amended (the "DPQR"), or the requirement to have separate herds where there are two quota registrations relating to one holding. Regulation 32 of the DPQR does provide for certain circumstances where production from the same cows can be recorded under two separate quota registrations, but there must be an underlying agreement that complies with the exceptions detailed in Regulation 32 of the DPQR, and both quota holders must meet the definition of a "producer".
Where we discover production or joint venture agreements are in place, we may visit the premises of both parties to the agreement to ensure that the terms of the agreements and on-farm practices are consistent. In the event of any inconsistencies between agreements and on-farm practices, or if the agreements fail to comply with the relevant legislation, the Agency will take such steps as it considers necessary to regularise the quota and levy position.
Regulation 4(7) of the Dairy Produce Quotas Regulations 2005 (as amended) specifies that a producer may only partition a holding between separate quota register entries "where a holding comprises more than one dairy enterprise".
Article 65 (c) of the Council Regulation 1234/2007 defines a "producer" as a farmer with a holding located within the geographical territory of the member state, who produces and markets milk or who is preparing to do so in the very near future. A ruling in the ECJ (Case C-341/89) stated "the status of producer presupposes that the person concerned independently manages the holding; ...".
Article 65(d) of the Council Regulation defines a "holding" as all the production units managed by a farmer..".
A "dairy enterprise" is defined by the Dairy Produce Quotas Regulations 2005 (as amended) as "an area stated by the occupier of that area to be run as a self contained dairy produce business"...
Regulation 32 of the Dairy Produce Quotas Regulations 2005 (as amended) prevents the production of milk by two producers from the same cows, except in certain, limited, circumstances.
Page published: 9 May 2011