Explanatory note

Article 1(2)(a) of Council Regulation (EEC) No. 1343/86 (O.J. No. L119, 8.5.86, p.34) amended Article 4(1)(a) of Council Regulation (EEC) No. 857/54 (O.J. No. L90, 1.4.84, p.13) by enabling Member States to grant compensation to producers with a milk quota in excess of a level which was to be determined who undertake to surrender at least 50% of that milk quota. Until this amendment was made, producers could only obtain compensation for the surrender of the whole of their milk quota. The level of milk quota referred to above was fixed by Article 1(1) of Commission Regulation (EEC) No. 2133/86 (O.J. No. L187, 9.7.86, p.21) at 250,000 kilogrammes (242,790 litres).

This Scheme provides for the payment of compensation to certain holders of milk quota in Scotland. Under the Scheme, compensation is to be paid to any producer who holds unused quota and who must either undertake to surrender the total of the milk quota registered in his name and to discontinue milk production, or to reduce his milk production and surrender not less than 50% of his total registered quota.

Paragraph 3 provides that the time and procedural requirements for applications for com pensation shall be published in the Gazette and the farming press. The methods by which payments may be made to persons under the Scheme are explained in paragraph 5. Paragraph 6 lays down the rules for the acceptance of applications in the event of over-subscription.

An applicant for compensation who does not own all the land which he occupies must attempt to obtain the consent of any person who owns or is a superior landlord of the tenancy (“the landlord”), unless consent has already been obtained or is determined as being unreasonably refused (paragraph 7).

Paragraphs 8 and 9 spell out the criteria for deciding whether or not a landlord’s consent has been unreasonably refused and paragraphs 10 and 11 deal with arbitration on this matter in cases 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 landlords as a whole are entitled in the absence of agreement. The amount is to be apportioned among the landlords by agreement or arbitration (paragraph 14).

Arbitrations under the Scheme are, in the case of an agricultural holding within the meaning of the Agricultural Holdings (Scotland) Act 1949, to be referred to a single arbiter (or to the Scottish Land Court) in accordance with the provisions of Schedule 6 to the 1949 Act, three of the provisions of which have been amended for the purposes of this Scheme in order to speed up proceedings. Several more provisions of that Schedule have been disapplied to arbitrations under this Scheme, in particular the stated case procedure. In any case other than an agricultural holding, reference is to be made to the Scottish Land Court for determin ation. The provisions of Schedule 6 to the 1949 Act as amended by this Scheme are applied to the procedures of the Scottish Land Court (paragraph 15).

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 and for recovery of sums agreed or awarded under the Scheme (paragraph 18).

Paragraph 19 makes provision for the recovery by the Secretary of State of compensation paid in certain specified circumstances.

This Scheme applies to Crown land (paragraph 20).

This Scheme also revokes the Milk (Partial Cessation of Production) (Scotland) Scheme 1986 (paragraph 21).

Duly authorised officers of the 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 by virtue of section 2 of the Milk (Cessation of Production) Act 1985.

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