Explanatory note

Article 1(2)(a) of Council Regulation (EEC) No. 1343/86^f1 amends Article 4(1)(a) of Council Regulation (EEC) No. 857/84^f2 by enabling Member States to grant compensation to producers, with a milk quota in excess of a specified level who undertake to surrender at least 50% of that milk quota. The level of milk quota referred to above is fixed by Article 1(1) of Commission Regulation (EEC) No. 2133/86^f3 at 250,000 kilogrammes (242,790 litres).

In exercise of the above powers, the Scheme provides for the payment of compensation by the Minister of Agriculture, Fisheries and Food, in relation to England, and the Secretary of State for Wales, in relation to Wales, to certain holders of milk quota. Recipients must either undertake to surrender their total quota, or have a quota in excess of a specified level and undertake to reduce their milk production and to surrender not less than 50% of their milk quota (paragraph 4).

The Scheme is administered in identical terms to the 1986 Scheme (S.I. 1986/1612).

The time limits and procedural requirements for applications for compensation are to be published in the London Gazette and the farming press (paragraph 3) and it is provided that in the event of over-subscription preference shall be given to applications in order to their receipt by him (paragraph 6).

An applicant for compensation who does not own all of the land which he occupies must attempt to obtain the consent of any person who owns or has a superior tenancy or licence of that holding or any part of it (the “landlords”) (paragraph 7). Paragraphs 8 and 9 spell out the criteria for deciding whether or not a landlord’s consent has been unreasonably refused and paragraph 10 deals with arbitration on this matter in case of dispute.

Paragraph 12 provides that landlords shall be entitled to obtain from the tenant a payment in respect of the relevant quota and paragraph 13 sets out the amount (the “landlord’s amount”) to which the landlords as a whole are entitled in the absence of agreement. That amount is to be apportioned among the landlords by agreement or arbitration (paragraph 14).

Arbitrations under the regulations are to be by a single arbitrator in accordance with the provisions of Schedule 11 to the Agricultural Holdings Act 1986. By paragraph 16 two of the provisions of that Schedule are applied for the purposes of this Scheme, with modifications in order to speed up proceedings and other provisions have been disapplied to arbitrators or their awards under this Scheme, in particular, the case stated procedure set out in paragraph 26 of that Schedule (paragraph 16(5)). An appeal to the Dairy Produce Quota Tribunal on any question of law or as to the jurisdiction of an arbitrator has been created by paragraph 17.

Provision is made for recovery from a tenant of any loss suffered by a landlord as a result of an application for compensation by the tenant which fails to comply with paragraph 7 or paragraph 11, and for recovery through the County Court of sums agreed or awarded under the paragraphs (paragraph 20).

Duly authorised officers of the Minister or Secretary of State have power to enter on any land occupied by any person to whom a payment of compensation has been made and to require any person who is engaged in the production of milk to furnish accounts and records in his possession or under his control (section 2 of the Milk (Cessation of Production) Act 1985 (c. 4)).

By section 3 of the above Act it is made an offence punishable on summary conviction by a fine not exceeding £2,000 knowingly or recklessly to make a statement which is false in a material particular for the purpose of obtaining compensation, or intentionally to obstruct an authorised officer.

This Scheme applies to Crown land (paragraph 24).