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Dairy Produce Quotas Regulations (Northern Ireland) 2002

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Citation and commencement

1.  These Regulations may be cited as the Dairy Produce Quotas Regulations (Northern Ireland) 2002 and shall come into operation on 31st March 2002.

Application

2.  These Regulations shall apply in relation to producers, purchasers and other relevant persons in relation to whom the Department is the relevant competent authority.

Interpretation

3.—(1) In these Regulations—

  • “agricultural area” includes areas used for the purposes of agriculture within the meaning of section 43(1) of the Agriculture Act (Northern Ireland) 1949(1);

  • “authorised officer” means a person (whether or not an officer of the Department) who is authorised by the Department, either generally or specifically, to act in matters arising under these Regulations and the Community legislation;

  • “the Commission Regulation” means Commission Regulation (EC) No. 1392/2001 laying down detailed rules for applying Council Regulation (EEC) No. 3950/92 establishing an additional levy on milk and milk products(2);

  • Commission Regulation 1756/93” means Commission Regulation (EEC) No. 1756/93 fixing the operative events for the agricultural conversion rate applicable to milk and milk products(3);

  • Commission Regulation 2562/93” means Commission Regulation (EEC) No. 2562/93 laying down detailed rules for the application of Regulation (EEC) No. 2055/93 allocating a special reference quantity to certain producers of milk and milk products(4);

  • “Community compensation scheme” means—

    (a)

    the scheme instituted by Council Regulation (EEC) No. 2187/93 providing for an offer of compensation to certain producers of milk and milk products temporarily prevented from carrying out their trade(5) and Commission Regulation (EEC) No. 2648/93 laying down detailed rules for the application of Council Regulation (EEC) No. 2187/93(6);

    (b)

    the scheme instituted by Council Regulation (EC) No. 2330/98 providing for an offer of compensation to certain producers of milk and milk products temporarily restricted in carrying out their trade(7) and Commission Regulation (EC) No. 2647/98 laying down detailed rules for the application of Council Regulation (EC) No. 2330/98(8); or

    (c)

    both those schemes;

  • “the Community legislation” means the Commission Regulation, the Council Regulation, Council Regulation 2055/93, Commission Regulation 1756/93 and Commission Regulation 2562/93;

  • “consent or sole interest notice” means a notice, in relation to a holding or part of a holding, which states that—

    (a)

    the person providing that notice is the occupier of that holding or part of a holding and that no other person has an interest in that holding or part of a holding; or

    (b)

    every person having an interest in that holding or part of a holding, the value of which interest might be reduced by the apportionment or prospective apportionment to which that notice relates, agrees to that apportionment or prospective apportionment;

  • “the Council Regulation” means Council Regulation (EEC) No. 3950/92 establishing an additional levy in the milk and milk products sector(9), as last amended by Commission Regulation (EC) No. 603/2001 adapting the total quantities referred to in Article 3 of Council Regulation (EEC) No. 3950/92(10);

  • “Council Regulation 2055/93” means Council Regulation (EEC) No. 2055/93 allocating a special reference quantity to certain producers of milk and milk products(11);

  • “cow” includes a heifer that has calved;

  • “dairy enterprise” means an area stated by the occupier of that area to be run as a self-contained dairy produce business;

  • “dairy produce” means produce, expressed in kilograms or litres (one kilogram being 0.971 litres), in respect of which levy is payable under the Community legislation;

  • “delivery” has the same meaning as in Article 9(g) of the Council Regulation;

  • “the Department” means the Department of Agriculture and Rural Development;

  • “direct sale” means a sale within the terms of Article 9(h) of the Council Regulation;

  • “direct sales quota” means the quantity of dairy produce which may be sold or transferred free of charge by direct sale from a holding in a quota year without the direct seller in occupation of that holding being liable to pay levy;

  • “direct seller” means a person who produces milk and treats that milk or processes it to produce milk or milk products on his holding and subsequently sells or transfers that milk or those milk products free of charge without their having been further treated or processed by an undertaking which treats or processes milk or milk products;

  • “electronic communication” has the same meaning as in the Electronic Communications Act (Northern Ireland) 2001(12);

  • “eligible heifer” means any heifer which—

    (a)

    at the date of service of a notice referred to in regulation 15(2)(a), was on land subject to that notice; or

    (b)

    at the date of the coming into force of an order referred to in regulation 15(2)(a) or (b), was on land subject to that order,

    and calves for the first time on a day which falls—

    (i)

    where that notice or order has effect or is in force for a period which expires on or before the expiry of the quota year during which it is, respectively, served or made, within the period of twelve months immediately preceding the day after the date on which that notice or order ceases to have effect or be in force, as the case may be; and

    (ii)

    in any other case, within the quota year during which that notice or order is served or made or at any time thereafter when that notice or order has effect or is in force;

  • “the General Provisions Regulations” means the Dairy Produce Quotas (General Provisions) Regulations 2002(13);

  • “holding” has the same meaning as in Article 9(d) of the Council Regulation;

  • “interest”, except where used in regulation 21(3), includes a licence to occupy land and the interest of a mortgagee and a trustee, but does not include the interest of a beneficiary under a trust or settlement;

  • “levy” means the levy payable under the Community legislation and these Regulations to the Department;

  • “national reserve” has the meaning given it by regulation 2 of the General Provisions Regulations;

  • “occupier” includes, in relation to land in respect of which there is no occupier, the person entitled to grant occupation of that land to another, and, during the currency of an interest referred to in regulation 8(5)(a), the person entitled to grant occupation when that interest terminates;

  • “producer” has the same meaning as in Article 9(c) of the Council Regulation;

  • “prospective apportionment” means, in relation to quota on a holding, apportionment of quota pursuant to regulation 10 which will take place if there is a change in occupation of part of a holding to which that prospective apportionment relates (other than a change in respect of which regulation 8(5) applies) within six months of that prospective apportionment;

  • “purchaser” means a purchaser within the meaning of Article 9(e) of the Council Regulation and, other than in regulation 25(1) and (2), and sub-paragraph (a) of paragraph 11 of Schedule 2, approved by the Department pursuant to regulation 25;

  • “purchaser quota” means the quantity of dairy produce which may be delivered by wholesale delivery to a purchaser during a quota year without that purchaser being liable to pay levy;

  • “purchaser special quota” means the quantity of dairy produce which may be delivered by wholesale deliveries against producers' special quota to a purchaser during a quota year without that purchaser being liable to pay levy;

  • “qualifying cow” means, for the purposes of any quota year, any eligible heifer which calves for the first time at a time when the number of eligible heifers exceeds the replacement number, whether or not the time of such calving falls during that quota year, but an eligible heifer which is a qualifying cow for the purposes of any quota year shall not be a qualifying cow for the purposes of any subsequent quota year;

  • “qualifying day” means, in respect of any qualifying cow, the day on which it calves and each day or part of a day thereafter during which a notice or order referred to in regulation 15(2) has effect or remains in force, as the case may be;

  • “quota” means direct sales quota or wholesale quota, as the case may be;

  • “quota year” means any of the periods of 12 months referred to in Article 1 of the Council Regulation (which concerns the fixing of the levy);

  • “registered wholesale quota” means wholesale quota registered pursuant to regulation 23(2);

  • “relevant person” means a producer, a purchaser, any employee or agent of a producer or of a purchaser, any milk haulier, any person undertaking butterfat testing for purchasers in a laboratory, a processor of milk or milk products, or any other person involved in the buying, selling or supply of milk or milk products obtained directly from a producer or purchaser;

  • “relevant competent authority” has the meaning given it by regulation 3 of the General Provisions Regulations;

  • “replacement number” means the nearest integer to 20 per cent of the total number of dairy cows on the land—

    (a)

    subject to a notice referred to in regulation 15(2)(a) as at the date of service of that notice; or

    (b)

    subject to an order referred to in regulation 15(2)(a) or (b) as at the date of the coming into force of that order,

    and where 20 per cent of the total number is half way between two integers, the nearest even integer shall be deemed to be the nearest integer;

  • “Scottish Islands area” means any one of—

    (a)

    the islands of Orkney; or

    (b)

    the islands of Jura, Gigha, Arran, Bute, Great Cumbrae and Little Cumbrae, and the Kintyre peninsula south of Tarbert;

  • “special quota” means the quota referred to in Article 1(1) of Council Regulation 2055/93;

  • “statutory provision” has the meaning assigned to it by section 1(f) of the Interpretation Act (Northern Ireland) 1954(14);

  • “submit” means, in relation to a document or information submitted to the Department, the act of sending that document or information as evidenced by proof of posting or delivery to a courier service, or, if an electronic communication, a record of its dispatch;

  • “transferee” means—

    (a)

    where quota is transferred with a holding or part of a holding, a person who replaces another as occupier of that holding or part of a holding; and

    (b)

    in any other case, the recipient of a transfer of quota;

  • “transferor” means—

    (a)

    where quota is transferred with a holding or part of a holding, a person who is replaced by another as occupier of that holding or part of a holding; and

    (b)

    in any other case, the person from whom quota is transferred;

  • “unused quota” means quota remaining unused after any direct sales or wholesale deliveries have been taken into account, adjusted pursuant to Article 4(1) of the Commission Regulation (which concerns the fat content of milk), and “used quota” shall be construed accordingly;

  • “wholesale delivery” means delivery from a producer to a purchaser; and

  • “wholesale quota” means the quantity of dairy produce which may be delivered by wholesale delivery to a purchaser from a holding in a quota year without the producer in occupation of that holding being liable to pay levy.

(2) In these Regulations any reference to anything done in writing or produced in written form includes a reference to an electronic communication which has been recorded and is capable of being subsequently reproduced.

(3) The Interpretation Act (Northern Ireland) 1954, except section 20(2)and (3), shall apply to these Regulations as it applies to an Act of the Northern Ireland Assembly.

Scottish Islands areas

4.—(1) Quota registered to direct sellers and producers within any Scottish Islands area can only be used by producers and purchasers against direct sales or wholesale deliveries of milk produced within that Scottish Islands area.

(2) Where a direct seller or producer has a part of his dairy enterprise outside the Scottish Islands area, he shall be treated for the purposes of this regulation as a direct seller or producer within any Scottish Islands area if he has 50% or more of his dairy enterprise within the Scottish Islands area.

(3) Paragraph (1) shall not apply to the reallocation of quota undertaken in accordance with Schedule 2.

(4) In this regulation “direct seller” and “producer” include a person who occupies land with quota whether or not that person is engaged in the sale or delivery of dairy produce.

Determination of levy

5.  For the purposes of Article 2(1) of the Council Regulation (which concerns the calculation of levy), the contribution of producers who make wholesale deliveries towards the levy shall be established, in accordance with the provisions of that Article, at the level of the purchaser.

Milk equivalence of dairy produce

6.—(1) For the purposes of Article 2(3) of the Commission Regulation (which concerns milk equivalence of dairy produce) the milk equivalence of dairy produce shall be calculated on the basis that each kilogram of dairy produce shall equal such quantity of milk referred to in paragraph (2) as is required to make that kilogram of dairy produce.

(2) The milk to which paragraph (1) relates is milk the fat content of which has not been altered since milking.

Adjustment of purchaser quota

7.—(1) Where any wholesale quota is increased or reduced in accordance with the Community legislation or these Regulations, the purchaser quota of any purchaser to whom that quota is applicable shall be correspondingly increased or reduced.

(2) On any transaction to which the second sub-paragraph of Article 2(2) of the Council Regulation (which concerns replacements of purchasers and changes of purchasers by producers) applies, any purchaser whose purchaser quota has been increased by virtue of such a transaction (other than as a result of a temporary transfer of quota under regulation 14) shall submit to the Department—

(a)on or before 14th May in the quota year immediately following the quota year in which that transaction took place, a statement setting out particulars of the transaction; and

(b)where appropriate, a declaration made and signed by the producer that the purchaser whose purchaser quota is to decrease has been notified of the particulars set out in the statement referred to in sub-paragraph (a).

(3) The statement referred to in paragraph (2)(a) and the declaration referred to in paragraph (2)(b) shall be made in such form as the Department may reasonably require.

(4) Subject to paragraph (5), where during a quota year a producer changes from being registered with one purchaser to being registered with any other purchaser—

(a)for the purposes of calculating liability for levy pursuant to regulation 19 in that quota year, any purchaser with whom he is newly registered shall request of the Department (in such form as the latter may reasonably require) that his purchaser quota be increased by an amount equivalent to such part of that producer’s registered wholesale quota as that producer shall determine;

(b)the amount of the increase of purchaser quota determined in accordance with sub-paragraph (a) shall not include the amount of quota necessary to cover the deliveries made by the producer before the date of the change of purchaser, adjusted if necessary in accordance with the second sub-paragraph of Article 4(1) of the Commission Regulation, and such amount of quota shall remain available to the original purchaser;

(c)at the beginning of the quota year immediately following the quota year referred to in sub-paragraph (a), the purchaser with whom the producer is newly registered shall have his purchaser quota increased by such part of the producer’s remaining registered wholesale quota as that producer shall determine; and

(d)corresponding reductions of the purchaser quota of the original purchaser shall be made, and, where there are adjustments of quota of a producer registered with more than one purchaser, such reductions of purchaser quota shall be made in respect of such of those other purchasers in such proportions as may appear to the Department to be appropriate in all the circumstances.

(5) Where the amount of quota necessary to cover the deliveries made to an original purchaser and referred to in paragraph (4)(b) is affected by an adjustment of the quantity delivered by the producer (being an adjustment in accordance with the second sub-paragraph of Article 4(1) of the Commission Regulation)—

(a)in the event that an increase in the original purchaser’s quota is necessary to cover the deliveries made to him by the producer, the original purchaser may apply to the Department (in such form as the latter may reasonably require) to assess and make such increase, and make a corresponding reduction in the purchaser quota of the purchaser (or purchasers) with whom the producer is newly registered; and

(b)in the event that a reduction is capable of being made to the quota of an original purchaser who has more than is necessary to cover the deliveries made to him by the producer, any purchaser with whom the producer is newly registered and who requires an increase in purchaser quota to cover the deliveries made by the producer to him may apply to the Department (in such form as the latter may reasonably require) to assess and make the appropriate reduction, and make a corresponding increase in the purchaser quota of the said purchaser with whom the producer is newly registered,

and in each case upon such application the Department shall make the assessment requested and the appropriate adjustment.

(6) An application under paragraph (5)(a) or (b) shall be made no later than 15th June in the quota year immediately following the quota year during which the producer changed from being registered with the original purchaser to being registered with the other purchaser in question.

Transfer of quota with transfer of land

8.—(1) For the purposes of Article 7 of the Council Regulation (which concerns the transfer of quota with a holding when the holding is sold, leased, transferred by inheritance or subjected to other cases of transfer involving comparable legal effects for producers), in respect of a transfer of any holding or part of a holding, other than a transfer of a kind to which paragraph (5) or (7) refers, the transferee shall submit to the Department—

(a)a notice of transfer in such form as the Department may reasonably require—

(i)in the case of a transfer made by lease before 1st March, on or before 1st March in the quota year in which the transfer takes place; and

(ii)in the case of a transfer made by lease on any date during March or made at any time otherwise than by lease, on or before 31st March in the quota year in which the transfer takes place;

and

(b)such other information relating to the transfer, and within such time, as the Department may reasonably require.

(2) The notice referred to in paragraph (1)(a) shall, in the case of a transfer of part of a holding, include—

(a)statements from the transferor and transferee to the effect that they have agreed that the quota shall be apportioned taking account of the areas used for milk production as specified in the statement or that no such apportionment has been agreed and specifying the amounts of used and unused quota transferred; and

(b)where such an apportionment has been agreed, a consent or sole interest notice, provided by the transferor in respect of the entirety of the holding.

(3) Where there is a transfer of part of a holding—

(a)an apportionment of the quota relating to the holding shall be carried out in accordance with regulation 9; and

(b)any dairy produce which has been sold by direct sale or delivered by wholesale delivery from the holding during the quota year in which the change of occupation takes place and prior to that transfer shall be deemed, for the purposes of any levy calculation, to have been sold or delivered from each part of the holding in proportion to that apportionment, unless the parties agree otherwise and notify the Department in such form as the Department may reasonably require, at the time of the submission of the notice or other information pursuant to paragraph (1) of the agreement.

(4) A prospective apportionment of quota in respect of a part of a holding may be made in accordance with regulation 10.

(5) No person shall transfer quota on a transfer of any holding or part of a holding in the following cases—

(a)the grant of—

(i)a licence to occupy land; or

(ii)a tenancy of any land under which a holding, or part of a holding, is occupied for a period of less than twelve months;

(b)the termination of a licence or tenancy to which sub-paragraph (a) applies.

(6) Where a notice of transfer has not been submitted in accordance with the provisions of paragraph (1)(a), then for the purposes of any levy calculation—

(a)the unused quota transferred shall not be treated as a part of the transferee’s quota entitlement for the quota year in which the transfer takes effect but shall be treated as if it remained unused quota available where appropriate for reallocation by the Department in that quota year in accordance with paragraph 7 of Schedule 2;

(b)the notice shall be disregarded by the Department for the quota year to which it applies and shall not be noted on any register maintained under regulation 23 until the following quota year; and

(c)a transferee shall not be entitled to demand that, by reason of such a transfer, an amendment be made to the amount of quota, if any, which has been reallocated to him under Schedule 2 for the quota year in which the transfer takes effect.

(7) No person shall transfer quota on a transfer of a holding or part of a holding where the transfer would result in an increase or reduction in the total direct sales quota or total wholesale quota available for use by dairy enterprises located within a Scottish Islands area.

Apportionment of quota

9.  Subject to regulations 8(5) and (7), 10(4) and (5) and 11, where there is a transfer of part of a holding, and a notice of transfer has been submitted in accordance with regulation 8(1)(a), the apportionment of the quota or special quota relating to that holding shall be carried out—

(a)in accordance with the agreed apportionment set out in the notice referred to in regulation 8(1)(a); or

(b)where there is no such agreement, by arbitration in accordance with the provisions of Schedule 1.

Prospective apportionment of quota

10.—(1) The occupier of a holding who intends that a prospective apportionment of quota will be applied to it shall submit to the Department an application in such form as the Department may reasonably require, requesting either—

(a)that a prospective apportionment of quota relating to the holding be made taking account of areas used for milk production as set out in the application; or

(b)that a prospective apportionment of quota be ascertained by arbitration in accordance with Schedule 1.

(2) A request for a prospective apportionment of quota may be withdrawn by a notice in writing to the Department given by the occupier of the holding to which the prospective apportionment relates.

(3) Where the occupier of a holding requests that a prospective apportionment be made in accordance with paragraph (1)(a), or gives notice in writing of the withdrawal of such a request in accordance with paragraph (2), that request or notice shall be accompanied by a consent or sole interest notice in respect of the entirety of the holding.

(4) Where there is a change of occupation of part of a holding (other than a change to which regulation 8(5) applies) and within the six months preceding that change of occupation—

(a)the occupier of that holding has requested a prospective apportionment of quota in respect of that part of the holding and has submitted a notice in accordance with regulation 8(1), indicating that an apportionment of quota has been agreed; or

(b)a prospective apportionment of quota relating to that part of that holding has been or is in the process of being made by virtue of Schedule 1,

the apportionment shall be carried out in accordance with paragraph (5).

(5) Where quota is apportioned in accordance with this paragraph, the apportionment shall be carried out in accordance with—

(a)any prospective apportionment of quota relating to that part of that holding made under paragraph (1) unless the request for that prospective apportionment was withdrawn before the change of occupation to which it relates takes place;

(b)if no such prospective apportionment has been made, any prospective apportionment which is in the process of being made under paragraph (1); and

(c)in any other case, regulation 9.

Notification by the Department of apportionment of quota by arbitration

11.—(1) Where the Department has reasonable grounds for believing that the areas used for milk production on a holding—

(a)are not as specified in a notice or application submitted pursuant to regulation 8 or 10(1) respectively; or

(b)were not as agreed between the parties at the time of apportionment in a case where no such notice or application has yet been submitted,

it may give notice of this fact to the person who submitted that notice or application, or in the case where neither was submitted, to the transferee.

(2) In any case to which paragraph (1) applies, the apportionment or prospective apportionment of the quota concerned shall be made by arbitration in accordance with Schedule 1.

Transfer of quota without transfer of land

12.—(1) For the purposes of sub-paragraph (e) of Article 8 of the Council Regulation (which permits the authorisation of a transfer of quota without transfer of the corresponding land with the aim of improving the structure of milk production at the level of the holding), an application for transfer of quota without transfer of land, other than an application for a transfer of a kind to which paragraph (7) refers, may be submitted by the transferee to the Department for approval, provided that it is submitted no later than ten working days before the intended date of the transfer and that application is in such form as the Department may reasonably require.

(2) The application referred to in paragraph (1) shall include—

(a)statements from the transferor and transferee that they have agreed to the transfer of quota, stating the amounts of used and unused quota transferred and explaining how the transfer is necessary to improve the structure of the businesses of the transferor and transferee;

(b)a consent or sole interest notice from the transferor in respect of the entirety of the holding from which the quota is to be transferred; and

(c)a statement from the transferee that he is in milk production or intends to commence milk production on his holding within six months of the intended date of transfer, with an undertaking that he will continue to be, or will be, in milk production at the end of that six-month period.

(3) Where the Department has received an application pursuant to paragraph (1), it may require that the transferor or transferee shall produce such other information relating to the application, and within such time, as the Department may reasonably determine.

(4) Where an application submitted pursuant to paragraph (1) has been approved by the Department, it may subsequently withdraw from the transferee, for inclusion in the national reserve, the quota transferred, provided that it—

(a)has reasonable grounds for believing that the undertaking provided by the transferee pursuant to paragraph (2)(c) has been breached;

(b)is satisfied that there is no justification for releasing the transferee from that undertaking pursuant to paragraph (5);

(c)serves on the transferee a notice to this effect;

(d)gives the transferee an opportunity to make written representations within such time as the Department considers reasonable; and

(e)considers any such representations,

and the Department shall transfer that quota to the national reserve until such time as the transferee resumes or commences milk production.

(5) Where an application submitted pursuant to paragraph (1) has been approved by the Department, it may release the transferee from the undertaking provided pursuant to paragraph (2)(c) where the Department is satisfied that the release is justified in the light of exceptional circumstances which have resulted in the transferee ceasing to be, or failing to become, a producer, and which could not have been avoided or foreseen by the transferee at the time of the submission of the application.

(6) The exceptional circumstances referred to in paragraph (5) are—

(a)the inability of the transferee to conduct his business for a prolonged period as a result of the onset of ill-health, injury or disability;

(b)a natural disaster seriously affecting the holding;

(c)the accidental destruction of buildings used for the purposes of milk production;

(d)without prejudice to sub-paragraph (e), an outbreak of illness or disease seriously affecting the dairy herd;

(e)the serving of a notice or the making of a declaration under an order made under Article 12(1) of the Diseases of Animals (Northern Ireland) Order 1981(15) or the adoption of an order pursuant to section 1 of the Food and Environment Protection Act 1985(16); and

(f)the loss of a significant proportion of the forage area as a result of the compulsory purchase of the holding or part of a holding.

(7) In conformity with sub-paragraph (d) of Article 8 of the Council Regulation (which provides for the determination of regions within which such transfers may be authorised), no application submitted pursuant to paragraph (1) shall be approved by the Department where the transfer would result in an increase or reduction in the total direct sales quota or total wholesale quota available for use by dairy enterprises located within a Scottish Islands area.

National reserve

13.  The Department may make allocations from the national reserve in accordance with the Community legislation.

Temporary transfer of quota

14.—(1) For the purposes of Article 6 of the Council Regulation (which concerns the temporary transfer of quota), a producer may agree with any other producer to make a temporary transfer, other than a temporary transfer of a kind to which paragraph (4) refers, of all or part of any unused quota which is registered under regulation 23 as permanently held by him for a period of one quota year to that other producer.

(2) The Department may require a reasonable charge to be paid for the registration of any temporary transfer of quota, provided that the transfer takes place within a quota year in respect of which it has announced before the beginning of that quota year that it intends to make such a charge, in such a manner as it considers likely to come to the attention of producers.

(3) Where there is an agreement to make a temporary transfer pursuant to paragraph (1), the transferee shall notify the Department of the agreement in such form as the Department may reasonably require, and shall submit the notice, together with any charge payable pursuant to paragraph (2), to reach the Department no later than 31st March in the quota year in which the agreement is made.

(4) No producer shall enter into an agreement to make a temporary transfer pursuant to paragraph (1) which would result in a reduction in the total wholesale quota or total direct sales quota available for use by dairy enterprises located within a Scottish Islands area.

Temporary reallocation of quota

15.—(1) For the purposes of the reallocation of quota referred to in Article 2(1) of the Council Regulation, the Department may, for any quota year, award to a producer referred to in paragraph (2) a temporary reallocation of an amount of any surplus quota in accordance with the provisions of this regulation.

(2) This regulation shall apply to a producer who has quota registered as his in relation to a holding which—

(a)at any time during that quota year is in whole or in part subject to a declaration or notice prohibiting or regulating the movement of dairy cows pursuant to an order made under the Diseases of Animals (Northern Ireland) Order 1981; or

(b)is situated wholly or partly within an area which at any time during that quota year has been designated by an order adopted pursuant to section 1 of the Food and Environment Protection Act 1985.

(3) Subject to paragraph (4), a producer referred to in paragraph (2) may be awarded a temporary reallocation of surplus quota for any quota year in which the notice or an order referred to in paragraph (2) has effect or remains in force, as the case may be, and the amount of any such award shall be calculated either—

(a)as the amount equal to 16 litres per qualifying cow per qualifying day in any quota year; or

(b)as the amount by which in the quota year in question the producer’s production exceeds his quota entitlement, whichever amount is less.

(4) An award to a producer pursuant to paragraph (3) shall not be available in respect of a quota year during which that producer transfers unused quota pursuant to regulation 8 or 12, makes a temporary transfer of quota pursuant to regulation 14, or purchases cows or in-calf heifers for dairy purposes, unless the Department is satisfied that the agreement to transfer, temporarily transfer or purchase, was entered into before service of the notice, or the coming into force of an order, referred to in paragraph (2).

Special allocation of quota

16.  Where, by reason of a mistake made by the Department, a person has not been allocated any quota, or has been allocated a smaller quantity of any such quota than he would have been allocated if the mistake had not been made, the Department may allocate to that person from the national reserve such quota as will compensate, in whole or in part, for that mistake.

Conversion of quota

17.—(1) For the purposes of the provisions of Article 4(2) of the Council Regulation (which concerns changes from direct sales to wholesale delivery and vice versa), the second sub-paragraph of Article 2(2) of the Council Regulation (which concerns replacements of purchasers), and this regulation, a producer may apply to convert, temporarily or permanently, direct sales quota to wholesale quota or wholesale quota to direct sales quota.

(2) Where a producer wishes to convert quota permanently or temporarily in any quota year, he shall submit to the Department an application in such form as the Department may reasonably require, and such application shall—

(a)state the amount (if any) of that producer’s direct sales quota, wholesale quota, direct sales and wholesale deliveries for the quota year in which the application is made, the amount of unused quota which he holds at the time of the application and the amount which he wishes the Department to convert; and

(b)include such other information as the Department may reasonably require in order to assess whether the requirements of Article 4(2) of the Council Regulation and Article 3 of the Commission Regulation (which concerns representative fat content) are fulfilled.

(3) The application referred to in paragraph (2) shall be submitted by the producer to the Department by—

(a)in the case of a permanent conversion of quota, 31st December in the quota year in which the conversion is intended to take effect; or

(b)in the case of temporary conversion of quota, 14th May in any year following the end of the quota year in which that temporary conversion of quota takes place.

(4) Subject to paragraphs (5) and (6), where a producer has permanently converted quota in any quota year, he shall not subsequently in that quota year transfer out quota, of the type to which he has converted, whether temporarily or otherwise.

(5) Where, upon an application to the Department by a producer who has permanently converted quota in any quota year, the Department is satisfied that exceptional circumstances of a type described in regulation 12(6) have resulted in a significant fall in milk production or a significant failure to achieve a planned increase in milk production, which, in the opinion of the Department, could have been neither foreseen nor avoided by the producer at the time of his permanent conversion, it may, in the same quota year in which the permanent conversion occurred, release that producer from the restriction in paragraph (4) to the extent that is required so as to allow the transfer of the amount of quota that the Department considers has remained unused in the particular case.

(6) The restriction in paragraph (4) shall not apply to any producer who, in the immediately preceding quota year, has temporarily converted quota.

Representative fat content of milk

18.  A producer who in any quota year comes within the first indent of Article 3(7) of the Commission Regulation (which concerns the representative fat content of milk from certain new producers) may benefit from the negative correction provided for in the third sub-paragraph of Article 4(1) thereof only if, before 1st March in that quota year, he confirms to the Department that in that quota year he has maintained in his dairy herd breeds of cow with characteristics similar to those in the herd in the first 12 months of production and undertakes to maintain such breeds in his dairy herd for the remainder of that quota year.

Reallocation of quota and calculation of levy liability

19.  Schedule 2 shall apply in respect of the reallocation of quota and the calculation of levy liability for the purposes of Article 2(1) of the Council Regulation (which concerns the calculation of levy whether or not following a reallocation of quota).

Prevention of avoidance of levy

20.—(1) Subject to paragraph (2), where in any quota year a producer makes sales or deliveries of milk or milk products from milk produced by any cows and subsequently in the same quota year another producer makes sales or deliveries of milk or milk products from milk produced by any or all of the same cows, the second producer shall be deemed for the purposes of these Regulations to have made those sales or deliveries in the capacity of agent for the first producer.

(2) Paragraph (1) shall not apply where—

(a)an agreement has been entered into by the first producer for the sale or lease of the cows in question or the second producer has inherited them from the first producer; and

(b)the cows are kept on the second producer’s holding.

Payment of levy

21.—(1) In respect of the collection of levy, the Department shall be the competent authority for the purposes of the Community legislation.

(2) For the purposes of Article 2(3) of the Council Regulation and Article 6 of the Commission Regulation (both of which concern payment of levy by direct sellers), or Article 2(2) of the Council Regulation (which concerns payment of levy by purchasers in respect of wholesale deliveries) and the payment of other penalties for which provision is made in Articles 5 and 6 of the Commission Regulation, the levy and other penalties referred to in those provisions shall be paid to the Department.

(3) Where any part of the levy remains unpaid after 1st September in any year, the Department may recover from the direct seller or, as the case may be, the purchaser, the amount of the levy outstanding at that date together with interest in respect of each day thereafter until the said amount is recovered at the rate of one percentage point above the sterling three month London interbank offered rate.

(4) For the purposes of the third sub-paragraph of Article 2(2) of the Council Regulation (which concerns deduction of levy liability), where a producer making wholesale deliveries to a purchaser exceeds his wholesale quota, following adjustment of that quota where appropriate and in accordance with Article 4(1) of the Commission Regulation, that purchaser may immediately deduct from the sums owed to the producer in respect of the deliveries an amount corresponding to the amount of levy that would otherwise be payable by him in respect of the excess.

Annual statements

22.—(1) The Department may, in respect of—

(a)any person in whose name any direct sales quota is registered and who fails to submit to the Department by 14th May in any year any declaration which he is required to forward by Article 6(2) of the Commission Regulation; or

(b)any purchaser approved by the Department pursuant to Article 13(2) of the Commission Regulation and regulation 25 and who fails to submit to the Department by 14th May in any year any summary which he is required to forward by Article 5(2) of the Commission Regulation,

recover a reasonable charge in respect of any visit to any premises which the Department has reasonably considered that an authorised officer should make in order to obtain the declaration or summary in question.

(2) If a purchaser is requested by the Department to submit to it a revised version of the summary referred to in paragraph (1)(b), he shall submit such a version of the summary revised in the manner requested within ten working days of that request.

Registers to be prepared and maintained by the Department

23.—(1) The Department shall—

(a)maintain—

(i)a direct sales register, being a register of entries referred to in sub-paragraph (b); and

(ii)a register of particulars of direct sales by each direct seller; and

(b)prepare a direct sales register entry in respect of each direct seller setting out in particular—

(i)his name;

(ii)his trading address, or, where there is more than one such address, each such address and his principal trading address;

(iii)a reference number which serves to identify him;

(iv)the direct sales quota available to him for the quota year excluding the quota referred to sub-paragraph (v); and

(v)quota issued to him as special quota,

and shall send each direct seller a copy of the entry relating to him.

(2) The Department shall—

(a)maintain a wholesale register, being a register of entries referred to in sub-paragraph 2(b); and

(b)prepare a wholesale register entry in respect of each producer setting out in particular—

(i)his name;

(ii)his trading address, or, where there is more than one such address, each such address and his principal trading address;

(iii)a reference number which serves to identify him;

(iv)the wholesale quota available to him for the quota year excluding the quota referred to in sub-paragraph (v);

(v)quota issued to him as special quota; and

(vi)a list of the names and addresses of each purchaser whose purchaser quota will be calculated to take into account all or part of that producer’s total wholesale quota, and of the wholesale quota registered with each purchaser, showing the representative fat content base of that quota calculated in accordance with Article 3 of the Commission Regulation,

and shall send to each producer a copy of the entry relating to him and, to each purchaser named on the list referred to in sub-paragraph (vi), a copy of that part of the entry relating to his purchaser quota.

(3) The Department shall—

(a)maintain a register of purchaser notices, being a register of notices containing the information specified in sub-paragraph (b); and

(b)prepare a purchaser notice in respect of each purchaser setting out—

(i)his name;

(ii)his purchaser quota; and

(iii)his purchaser special quota,

and shall send each purchaser a copy of the notice relating to him.

(4) For the purposes of paragraphs (1) and (2), where a holding comprises more than one dairy enterprise, a direct seller or a producer may, on presenting to the Department a consent or sole interest notice in respect of that holding, agree with the Department the partition of that holding between separate direct sales register entries or wholesale register entries as specified in the agreement.

(5) The Department may make such enquiries as it reasonably considers to be necessary for the purposes of ensuring the accuracy of the registers which it is required to maintain pursuant to this regulation, and shall amend such registers—

(a)to record any allocations or adjustments made under or by virtue of these Regulations; or

(b)to make any correction or amendment which it reasonably considers to be necessary,

and, where the Department makes a correction or amendment, it shall notify any person affected by that correction or amendment.

(6) In this regulation, “direct seller” and “producer” include a person who occupies land with quota whether or not that person is engaged in the sale or delivery of dairy produce.

Inspection of entries in the Department’s registers

24.  The Department may, in response to a request—

(a)made in respect of a quota register entry referred to in regulation 23(1) or (2) by any person who is the direct seller or producer identified in that entry, or who gives the Department a statement in writing that he has an interest in the holding of the producer or direct seller identified in that entry, or by anyone who is the agent of such a person; or

(b)made by a purchaser in respect of an entry in the register referred to in regulation 23(3) relating to himself or, provided the request is made with the express written authority of the purchaser in question, relating to a specific purchaser,

on payment of a reasonable charge, supply to the person making the request a copy of that quota register entry.

Approval and registration of purchasers

25.—(1) For the purposes of Article 13 of the Commission Regulation (which concerns the approval of purchasers), a purchaser shall submit to the Department an application seeking that purchaser’s approval by the Department in such form as the latter may reasonably require.

(2) An application under paragraph (1) shall state the purchaser’s trading address, or, where there is more than one such address, each such address and his principal trading address.

(3) For the purposes of Article 13(2) of the Commission Regulation (which permits Member States to lay down stricter rules on the approval of purchasers), the Department shall only approve a purchaser where that purchaser—

(a)has given an undertaking to the Department to abide by the provisions of these Regulations and the Community legislation and to comply with that undertaking;

(b)has no history of having committed—

(i)an irregularity under, or material infringement of, any Community provision relating to a Community aid scheme; or

(ii)an offence under a statutory provision implementing a Community or domestic aid scheme; and

(c)has, by submitting to the Department such information as it may reasonably require, demonstrated to the reasonable satisfaction of the Department that he has a sound financial basis upon which to operate.

(4) Each purchaser shall—

(a)inform the Department of—

(i)any change in his trading address, or, where there is more than one such address, any change in any such trading address, any additional trading address and any change in his principal trading address; and

(ii)any factor or change in circumstance which the Department might reasonably consider materially to affect any matter that was relevant to its consideration of his application for approval, or which affects his ability to comply with the undertaking referred to in paragraph (3)(a);

(b)confirm to each producer supplying him that he is approved and supply on request details of that approval; and

(c)notify each producer supplying him if that approval is withdrawn.

Obligations of producers and purchasers with respect to registration and deliveries

26.—(1) Each direct seller shall register his quota with the Department.

(2) Each producer (within the extended meaning conferred by regulation 23(6)) who holds registered wholesale quota, including any producer who has temporarily ceased or who intends temporarily to cease making wholesale deliveries, shall register his quota with a purchaser and, if making deliveries, shall make them to a purchaser.

(3) Each purchaser shall maintain, in respect of all producers whose register entries include that purchaser’s name on the list referred to in regulation 23(2)(b)(vi)—

(a)a register corresponding to that maintained by the Department under regulation 23(2) in respect of that part of his purchaser quota attributable to each of those producers;

(b)a register of particulars of wholesale deliveries from each of those producers to that purchaser;

(c)the information required by paragraphs 2 to 5 of Article 14 of the Commission Regulation (which concerns the records required in connection with levy assessment); and

(d)a system approved by the Department for sampling the milk of each producer and determining its fat content.

(4) Each purchaser shall amend the register referred to in paragraph (3)(a) on each occasion when, under these Regulations, the equivalent register maintained by the Department is required to be amended in relation to producers registered in that purchaser’s register.

Registers as evidence

27.  Any entry in a register or notice required by these Regulations to be maintained by the Department shall in any proceedings be evidence of the matters stated therein.

Information

28.—(1) Each purchaser or producer shall provide such information to the Department as the Department may reasonably require in order that it is able to perform its functions under these Regulations and the Community legislation.

(2) Each purchaser shall submit to the Department on request, in a form from time to time to be determined by the Department, such statistics and forecasts relating to deliveries made or to be made to him, as the Department reasonably may require for the purpose of monitoring deliveries in relation to the total quantity for the United Kingdom referred to in Article 3(2) of the Council Regulation, and any such statistics shall be submitted within three working days of the end of the period to which the statistics relate, and any such forecast shall be submitted within 28 days of receipt by the purchaser of the request to provide that forecast.

(3) The Department shall provide each purchaser with a copy of such records as that purchaser reasonably may require for the purposes of his registration obligations under these Regulations and Article 5 of the Commission Regulation (which concerns the submission of summaries of producers' statements of deliveries or declarations that no deliveries have been received).

Withholding or recovery of compensation

29.  Where a producer has submitted an application for compensation in accordance with the Community compensation scheme and it appears to the Department that the producer has made a false or misleading statement in his application or has failed to comply with any of the requirements of that scheme, the Department may withhold or recover on demand from that producer the whole or any part of the compensation payable or paid to him.

Keeping and retention of records

30.—(1) For the purposes of Article 11(1) of the Commission Regulation (which requires Member States to take all necessary measures to ensure that the levy is correctly charged), and without prejudice to regulation 3 of the Common Agricultural Policy (Protection of Community Arrangements) Regulations 1992(17), a relevant person shall, in addition to fulfilling any relevant requirement of paragraphs 2 to 5 of Article 14 of the Commission Regulation (which concerns record keeping obligations of purchasers and producers), keep and retain such records, and for such periods, as are specified in Schedule 3.

(2) In this regulation, “relevant person” means a producer, a purchaser, any employee or agent of a producer or of a purchaser, any milk haulier, any person undertaking butterfat testing for purchasers in a laboratory, a processor of milk or milk products, or any other person involved in the buying, selling or supply of milk or milk products obtained directly from a producer or purchaser.

Administrative penalties

31.—(1) Subject to the provisions of Article 13(4) of the Commission Regulation (which confers a discretion on Member States not to impose penalties in certain circumstances) and paragraph (6), purchasers shall be subject to the administrative penalties specified in paragraphs (2) to (4).

(2) Where a purchaser fails to submit to the Department—

(a)a statement or declaration concerning the adjustment of purchaser quota in accordance with regulation 7(2);

(b)a revised summary of producers' statements in accordance with regulation 22(2); or

(c)monthly statistics in accordance with regulation 28(2),

he shall be liable to pay to the Department a penalty equivalent to the theoretical amount of levy due on 0.01 per cent of the quantity by volume of milk covered by that statement, declaration or revised summary, or those statistics, per calendar day of the delay in submission.

(3) Where a purchaser fails to submit to the Department pursuant to regulation 22(1) or (2) a summary or revised summary, as the case may be, of producers' statements which is accurate, and thereby causes an overstatement by him of deliveries made to him, he shall be liable to pay to the Department a penalty equivalent to the theoretical amount of levy due on 0.5 per cent of the quantity by volume of milk which comprises the overstatement.

(4) Where a purchaser fails to maintain accurate and updated records pursuant to Article 14(2) of the Commission Regulation and regulation 30, he shall be liable to pay to the Department a penalty equivalent to the theoretical amount of levy due on 0.5 per cent of the quantity by volume of milk concerned.

(5) For the purposes of the third sub-paragraph of Article 6(3) of the Commission Regulation (which requires Member States to impose proportionate penalties where producers submit incorrect declarations), and subject to the provisions of Article 6(5) of that Regulation (which confers a discretion on Member States not to impose penalties in certain circumstances) and paragraph (6), where a direct seller submits an annual declaration which overstates the volume of direct sales for the period covered by that declaration, he shall be liable to pay to the Department a penalty equivalent to the theoretical amount of levy due on 0.5 per cent of the quantity by volume of milk which comprises the overstatement.

(6) Notwithstanding the provisions of paragraphs (2) to (5), the penalties referred to therein shall—

(a)in the case of purchasers and direct sellers, be £60, where they would otherwise be less than that amount; or

(b)in the case of purchasers, be £60,000, and in the case of direct sellers, be £600, where they would otherwise exceed these respective amounts.

Offences and criminal penalties

32.—(1) Any person who fails without reasonable excuse to comply with a requirement imposed on him by or under these Regulations or the Community legislation, or who, without prejudice to the generality of the foregoing—

(a)fails to comply with a requirement made pursuant to regulation 28(1);

(b)in connection with these Regulations or the Community legislation—

(i)makes or causes to be made a statement, or uses or causes to be used a document, which he knows to be false in a material particular, or

(ii)recklessly makes or causes to be made a statement, or recklessly uses or causes to be used a document, which is false in a material particular;

or

(c)disposes of quota which he knows or might reasonably be expected to know is incorrectly registered in his name,

shall be guilty of an offence, and shall be liable—

(i)on summary conviction, to a fine not exceeding the statutory maximum, or to imprisonment for a term not exceeding three months, or to both; or

(ii)on conviction on indictment, to a fine, or to imprisonment for a term not exceeding two years, or to both.

(2) The Department may, following any conviction under paragraph (1)(b) against which there is no subsisting right of appeal or further appeal, by notice served on the person to whose quota that conviction relates withdraw from him such quota as may reasonably be regarded by the Department as obtained by him by reason of the falsehood upon which the conviction was founded.

(3) A notice served under paragraph (2) must be served within the period of twelve months beginning with the first day on which such notice may be served.

(4) Where an offence under this regulation which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(5) Where the affairs of a body corporate are managed by its members, the provisions of paragraph (1) shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

(6) In this regulation “requirement” does not include a requirement or restriction imposed on the Department or a person acting as arbitrator, nor does it include any restriction or obligation in or under regulation 8(5) or (7), 10(1), 14(4) or 17(2).

Confiscation and restoration of quota

33.—(1) On or before 14th May following the end of each quota year, each purchaser shall supply to the Department a list of those producers registered with that purchaser (whether for the whole or part of the quota year) who have not made deliveries to that purchaser during that year.

(2) Pursuant to Article 5 of the Council Regulation (which concerns the confiscation and restoration of quota), the Department shall notify—

(a)any producer who from information available to the Department appears not to have made deliveries or direct sales or a temporary transfer of quota pursuant to regulation 14 during the previous quota year, that his quota has been taken into the national reserve;

(b)any direct seller to whom Article 6(4) of the Commission Regulation (which concerns the late submission of declarations) applies that, unless that producer submits to the Department a declaration under Article 6(1) thereof within 30 days of the notification, his quota will be confiscated to the national reserve.

(3) Any quota withdrawn pursuant to Article 5 of the Council Regulation shall be placed in the national reserve with effect from the beginning of the quota year following the quota year for which the list referred to in paragraph (1) was supplied, the quota year for which the declaration indicating no direct sales was made, or the quota year for which no declaration was submitted, as the case may be.

(4) Any quota withdrawn pursuant to Article 5 of the Council Regulation may be restored to the producer in respect of the holding from which it was withdrawn within a period of six years from the beginning of the quota year in which it was withdrawn, in accordance with the provisions of this regulation.

(5) A producer who receives a notification of confiscation under paragraph (2) shall—

(a)within 28 days of receipt of that notification notify any person with an interest in the land comprised in the holding of the content of that notification; and

(b)within six months of receipt of that notification, submit a notification to the Department, in such form as the Department may reasonably require for that purpose, as to whether that producer wishes to retain the right to request restoration of the quota, and such a notification shall include—

(i)a statement that he is the occupier of the entirety of the holding and that no other person has an interest in all or any of it;

(ii)a statement of the agreed apportionment of quota taking account of the areas used for milk production, signed by every person with an interest in the land comprised in the holding; or

(iii)a statement requesting apportionment of the quota in accordance with an arbitration under paragraphs 1, 2, 3(5), 5, 6 and 8 to 19 of Schedule 1.

(6) Where a producer has notified the Department under paragraph (5)(b) that he wishes to retain the right to restoration of quota, he may request the Department to restore to him the quota relating to that holding or part holding provided that the request—

(a)is submitted to the Department by 15th July in the quota year following the quota year to which the request relates; and

(b)in the case of confiscation of quota arising from the lack of any declaration being submitted by a direct seller, following submission of any such declaration.

(7) Where a producer has notified the Department that he wishes to retain the right to restoration of quota and there is a change of occupation of all or part of the holding to which the quota relates, the new occupier may request the Department to restore to him the quota relating to that holding or part holding, provided that the request is received by the Department at least six months before the end of the six-year period referred to in paragraph (4) or within six months of the change of occupation, whichever is the earlier.

(8) Where quota is restored to part of a holding in respect of which an apportionment of quota has been made in accordance with or under paragraph 5(b)(ii) or (iii), in accordance with a request made under paragraph (6), or following a change of occupation of part of a holding pursuant to paragraph (7), the amount of quota to be restored to that part shall be determined in accordance with—

(a)the apportionment referred to in paragraph (5)(b)(ii) or (iii) and within that apportionment in proportion to the agricultural areas concerned; or

(b)where no such apportionment has been carried out, in the same proportion as the agricultural area concerned bears to the total agricultural area of the holding from which quota was withdrawn.

(9) Where a producer—

(a)fails to submit a notification in accordance with paragraph (5)(b);

(b)indicates on the notification submitted under paragraph (5)(b) that he does not wish to retain the right to restoration of quota;

(c)fails to request the restoration of quota in accordance with paragraph (6) or (7);

(d)having had quota restored to him in accordance with paragraph (6), fails to make deliveries or direct sales of dairy produce from the holding to which the quota relates within six months of his application for the restoration of quota or the end of the six year period, whichever is the earlier; or

(e)having had quota restored to him following a change of occupation referred to in paragraph (7), fails to make deliveries or direct sales of dairy produce from the holding within eighteen months of the change of occupation or the end of the six-year period, whichever is the earlier,

the relevant quota shall be taken into the national reserve.

Withdrawal of special quota

34.  Where a producer has special quota registered in his name and it appears to the Department that the producer has made a false or misleading statement in his application for special quota or has failed to comply with the requirements under the Community legislation in relation to special quota, the Department may withdraw the whole or any part of the special quota.

Revocations

35.—(1) Subject to paragraph (2), the Regulations specified in Schedule 4 are hereby revoked to the extent specified in that Schedule in so far as they apply to Northern Ireland.

(2) Subject to paragraph (3), paragraph (1) shall not affect the continued operation of regulations 30 and 31 of the 1997 Regulations in respect of any requirement imposed by, or anything done in connection with, those Regulations.

(3) Any undertaking given pursuant to regulation 11(2)(c) or (d) of the 1997 Regulations shall cease to have effect.

(4) In this regulation, “the 1997 Regulations” means the Dairy Produce Quotas Regulations 1997(18).

Sealed with the Official Seal of the Department of Agriculture and Rural Development on 8th March 2002.

L.S.

Liam McKibben

A senior officer of the

Department of Agriculture and Rural Development

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