15 June 2001

Levy claim referred to European Court

TWENTY-TWO Welsh dairy farmers who are being pursued by the Intervention Board for more than £5m in super-levy – which the farmers claim is not their responsibility – will now have to wait at least two years until key points of law are clarified by the European Court of Justice.

They, and three others who have ceased trading, took part in a scheme which involved them handing over control of their cows, milk quota and parts of their farms to Elm Farms Ltd, which traded as a direct seller. Under the contract, the company paid the farmers for looking after their farms and milking the cows. The milk belonged to Elm Farms Ltd.

In 1998 Elm Farms Ltd was liquidated after it had leased out all the quota belonging to the 25 farmers. Since then, the IB has been pursuing each farmer for super-levy it claims they owe.

The farmers, who are represented by Peter Williams of Burgess Salmon, have been advised that the scheme was entirely legitimate. It was a genuine direct sales operation where Elm Farms Ltd was responsible for the levy as the producer-processor.

The farmers say that even if Elm Farms Ltd is treated by the IB as a purchaser, the IB cannot legally recover levy directly from wholesale producers. In a test case on Apr 24, the Court of Appeal decided to refer the case to the European Court of Justice. &#42