4 June 1999

IB at fault over quota mistake

SOME farmers may have paid too much for quota cover after an error by the Intervention Board which inflated Aprils milk production figures.

Butterfat-adjusted output for the month was actually 1.249bn litres, 25m litres less than was thought. This puts deliveries 18m litres over quota, rather than the 43m litres originally reported.

Despite safeguards, two staff members missed a "faintly written" decimal point on a buyers return. "As a result, the delivery figure was inflated by a factor of 10," says the board.

A subsequent check highlighted this, but no routine inquiry was undertaken. "The manager who failed to carry out the check has now left the employment of the Intervention Board," a spokesman added.

May cumulative figures will be revised accordingly. While the mistake has not raised quota values, it may have stopped them easing back, says Charles Holt of the Farm Consultancy Group.

"It equates to about two-thirds of a days production, a fairly significant amount. We have done a few leasing deals, and farmers may have ended up paying a quarter of a penny too much."

The market is still too high, he believes. Typical 4% leased quota is worth 6.7p/litre, compared with an average break-even value of 6.25p. Producers are standing off. "Prices are creeping downwards. But they are still about 0.1p/litre higher than last year, despite a penny fall in the milk price." &#42