Guidance

Intervention and Private Storage Aid schemes

Financial support for traders and farmers from intervention and Private Storage Aid schemes

Introduction

This guide is aimed at traders who may be able to benefit from ‘intervention’ and Private Storage Aid (PSA) schemes. The aim of these schemes is to offer financial support at times when the prices of certain products - eg cereals and some dairy products - are weak. In other words, these schemes are not available at all times.

These schemes operate throughout the European Community (EC), under the authority of the European Commission. In the UK, they are managed by the Rural Payments Agency (RPA). Both types of scheme work by temporarily removing surplus product from the market.

Intervention schemes involve you selling quantities of your product into intervention. This enables RPA to manage these stocks strategically to help keep market prices of that product stable. With PSA schemes, you retain ownership of the product but receive EC payments in return for keeping agreed quantities in storage - and off the market - for a set period of time.

How intervention schemes work

Intervention schemes are market support measures that help to stabilise the prices of certain products. The schemes are funded by the European Union and managed in the UK by the RPA.

When prices of eligible products - eg cereals and butter - become low because of a surplus to demand, the European Commission may instruct RPA to buy some of this surplus stock and store it on behalf of the EC. This intervention to remove surplus product from the open market has the effect of stabilising prices for traders.

Intervention schemes can be seasonal or in response to exceptional market conditions. When intervention is opened for a particular product, farmers and traders are invited to offer eligible product for sale into intervention. The product offered needs to meet strict quality standards.

If you tender to offer product and your bid is accepted, you will be contracted to deliver this stock to public intervention storage. In return, you will receive a price related to the agreed intervention price for that product.

In some schemes, you can also offer to sell a product into intervention but store it in situ - in return for additional storage fees. Although the product is stored on your premises it becomes the property of the EC, so strict storage rules apply.

Stocks held in storage can then be sold out of intervention at a later date (when notified by the European Commission to do so) - when the market has recovered or for specified end uses.

Registering with RPA

You must be registered with RPA to offer products for intervention. To register, you can call the RPA Customer Service Centre on Telephone: 0345 603 7777. You will be asked to supply:

  • your business name and contact details
  • the name and address of anyone you want to have the authority to act on behalf of your business
  • your bank details (these details cannot be taken over the phone but a form will be sent to capture these)

Read about registering with RPA on the RPA website.

The cereals intervention scheme

If you are a farmer or trader registered with the RPA, you can offer to sell common wheat or barley into intervention. Your offer must be submitted during the buying season for cereals - currently 1 November to 31 May. Offers of barley into intervention is now only available by ‘Regulation opening the tendering procedure’. The Commission will notify intervention agencies when the opening Regulation is to be introduced.

The minimum quantity you can offer is 100 tonnes, but this can be made up of cereal pooled from up to four separate locations. The minimum for in situ takeover is 5,000 tonnes. To be accepted into either scheme, your cereal must meet at least minimum quality standards.

The current base price for cereal sold into intervention is €101.31 per tonne. So, the intervention price for May 2010 is €104.53 per tonne. You will be paid the equivalent in pounds sterling at the exchange rate when your grain is provisionally accepted by the RPA.

Download form CEPU1 to offer to sell cereal into intervention from the RPA website (PDF, 69KB).

You can submit your completed application by post to the RPA at the following address:

Rural Payments Agency
Lancaster House
Hampshire Court
Newcastle Upon Tyne
NE4 7YH

You can also email the form to cerealsintervention@rpa.gsi.gov.uk. If your offer is for wheat, you will also need to send the relevant test fee.

The current test fees are:

  • £392 plus VAT - for an offer based at one location
  • £429 plus VAT - for an offer based at two locations
  • £466 plus VAT - for an offer based at three locations
  • £503 plus VAT - for an offer based at four locations

In situ offers

You can also offer to sell cereal into intervention to be stored in situ and under your control on your premises. The minimum amount of cereal for an in situ offer is 5,000 tonnes. If you are approved to store grain in situ, your premises must meet certain criteria in terms of size, temperature, facilities and access. You will be paid storage fees in addition to the purchase price of the grain. This rate is published before the start of each season and is currently £2.87 per tonne per day for the first year.

To become an in situ offerer, you must register normally before the 31 August - ahead of the buying season due to start later that year. RPA will then arrange for your store to be inspected and assessed for suitability.

After making your offer

Once you have had an offer provisionally accepted, RPA will make arrangements for your grain - in the case of wheat - to be sampled and tested. If you are offering barley, this may also be inspected first.

After any testing, you will be told if your grain is acceptable and - where applicable - given instructions on delivering your grain to an intervention centre. You must arrange and cover the costs of this delivery.

When the final delivery has been made, you need to complete a claim form and submit it to RPA to organise payment.

Download RPA information on selling your cereal into intervention from the Agricultural Document Library (ADLib) website (PDF, 856K).

Butter intervention scheme

If you are a farmer or trader registered with the RPA, you can offer to sell eligible butter into intervention. Your offer must be submitted during the buying season for butter - currently 1 March to 31 August. Note that only unsalted butter is eligible for intervention. Salted butter is not eligible.

The EC’s decision on whether to allow butter intervention is based on average EU market prices, which are reported to the Commission each week. You can find information about the EU dairy market on the Europa website.

Eligibility

In order for your unsalted butter to be eligible for intervention it must:

  • have been manufactured in the 31 days preceding the date your offer is received
  • be produced by a creamery that’s been approved by RPA
  • be unsalted
  • be produced directly and exclusively from pasteurised cream
  • have a minimum butter fat content of 82% by weight
  • have a maximum water content of 16% by weight
  • meet certain compositional and quality standards
  • meet minimum quantity and packaging rules

You must be able to offer a minimum quantity of 20 tonnes in one lot in 25 kilogram containers. You will also need to support your offer with a security payment of €50 per tonne.

You can find more information on butter intervention on the RPA website](http://rpa.defra.gov.uk/rpa/index.nsf/0/B5692C711EB3BC9580256F72003DB670).

Delivery and payment

If your tender bid is successful, you will be given details of a cold store which will expect delivery of your butter within 28 calendar days of receiving confirmation that the bid has been successful. It’s your responsibility to arrange this. You will lose your security for any quantity not delivered within that time limit.

Your butter will be sampled after it has been delivered. Assuming it passes the quality control tests and is accepted into intervention, you will be paid at either the standing intervention purchase price or the agreed price in your offer document.

If your documentation is in order and legible, all payments will be made no later than the 65th calendar day following the takeover date. There is no longer a payment window.

Read information on selling your butter into intervention on the RPA website.

Find forms and information about butter intervention on the RPA website.

The skimmed milk powder intervention scheme

If you are a farmer or trader registered with the RPA, you can offer to sell eligible skimmed milk powder (SMP) into intervention. Your offer must be submitted during the buying season for SMP - currently 1 March to 31 August.

The European Commission’s decision on whether to allow SMP intervention is based on average EU market prices, which are reported to the Commission each week. You can find information about the EU dairy market on the Europa website.

Eligibility

Conditions for your SMP to be eligible for intervention include that it must:

  • be produced by a business that’s been approved by RPA
  • be manufactured by the spray process
  • be produced directly and exclusively from skimmed cow’s milk
  • meet certain compositional and quality standards
  • be manufactured within a specified time frame
  • meet minimum quantity and packaging rules

You must be able to offer a minimum quantity of 20 tonnes in 25 kilogram bags. You will also need to support your offer with a security payment of €50 per tonne.

Delivery and payment

If your tender bid is successful, you will be given details of a store which will expect delivery of your SMP within 28 calendar days of receiving confirmation that the bid has been successful. It’s your responsibility to arrange this. You will lose your security for any quantity not delivered within that time limit.

Your SMP will be sampled after it has been delivered. Assuming it passes the quality control tests and is accepted into intervention, you will be paid the full intervention price applicable on the date the SMP was manufactured. If the SMP’s protein content is less than 34%, your payment will be reduced accordingly.

If your documentation is in order and legible, all payments will be made no later than the 65th calendar day following the takeover date. There is no longer a payment window.

Find forms and information about SMP intervention on the RPA website.

The beef intervention scheme

You can only offer your beef for sale into intervention storage when beef intervention is opened by the EC. The Commission may decide to do this if the average price of UK beef falls below a set value for two weeks in a row.

There is currently no intervention beef purchasing taking place in the UK or any stocks of intervention beef held in storage.

Eligibility

When intervention is open, only slaughterhouses approved under Council Directive 64/433 - or livestock and meat traders who have their slaughtering carried out in such a slaughterhouse - can apply to offer beef into intervention. You must also be registered with the RPA and registered for VAT.

When intervention is open, everyone who has expressed an interest in offering - and is eligible - will be invited to tender. This invitation will include details on how to bid and the deadline for tender submission. The types of beef you can offer vary and are decided by the Commission, but your bid must offer a minimum of 10 tonnes.

You will need to support your offer with a pounds sterling security payment equivalent to €30 per 100 kilograms. This will be at the exchange rate applicable on the day you submit your bid. This security will be released once you have delivered the beef you are contracted to deliver.

To be accepted into intervention when the scheme is open, your carcasses and half carcasses must:

  • originate from within the European Community
  • be from animals under 30 months of age on the day of slaughter
  • come from carcasses weighing less than 340 kilograms
  • have obtained the health mark referred to in Directive 64/433
  • have all risk materials removed
  • be fit for storage and future use
  • not have been slaughtered due to emergency measures
  • be from animals raised according to current veterinary requirements
  • not exceed maximum radioactivity levels

Delivery and payment

When the beef intervention scheme is open, and if your bid is accepted, RPA will tell you where and when to deliver your quartered carcasses for cold storage. RPA will arrange to have the beef boned and boxed too. However, if you prefer, it may be possible to arrange an additional payment from RPA to carry out the boning yourself.

Health checks will be carried out on the beef after slaughter and again on entry into the boning hall. Once the beef has been accepted, RPA will arrange for a takeover certificate and your subsequent payment. Your payment is based on your original tender price and the total bone-in weight of carcasses taken over.

Private Storage Aid

Based on the market situation the EC will decide if and when it is appropriate to open a PSA scheme. Schemes can be opened using either fixed aid in advance or a tendering procedure.

When such a decision is made, a regulation is published announcing the opening of the scheme and setting out rates of aid and application procedures.

PSA is similar to an intervention scheme. Both help to stabilise the market of a particular product by removing supplies that are surplus to demand when prices become weak. This can be temporary - where the product is later re-released for sale on the EC market - or permanent - where the product is eventually exported from the EC.

The key difference is that a producer or trader contracted to a PSA scheme retains ownership of any product entered into storage. With intervention schemes, the RPA takes over control of the products bought on behalf of the EC.

PSA may be opened from time to time by the European Commission for the following products:

  • butter - salted or unsalted
  • sheep or goat’s cheese
  • white sugar
  • olive oil
  • beef
  • pigmeat
  • sheep or goat meat

PSA is currently only available in the UK for butter - see below for more details.

If you sign up to a PSA scheme, after one is announced, the products entered must be kept in storage for a specified period before you are allowed to release them back onto the market or export from the EC. In return, you will be paid a rate of aid set by the Commission that takes into account:

  • your storage costs
  • normal depreciation of quality
  • any foreseeable increase in the price of the product

The terms of the scheme will set a minimum and maximum contractual storage period.

Eligibility

To apply for PSA, you must be registered with RPA and have your storage facilities inspected and approved. Your business also needs to be registered for VAT.

For butter, your PSA application will not need to be supported by a security payment unless after 60 days of storage you wish to apply for an advance payment. The security shall be equal to the advance payment, plus 10%. This security money is refunded provided you have fulfilled all your contractual obligations.

PSA scheme rules are strict, with tight audit controls for successful applicants. If you are found to have broken the rules, you would lose your security and lose out on any aid payments. You may also be suspended from the scheme.

Download detailed RPA information about PSA from the ADLib website (PDF, 113KB).

PSA scheme for butter

PSA is currently available for eligible butter. Applications must relate to quantities you already have stored. To be eligible, the butter must:

  • have been produced in an RPA-approved creamery
  • have been produced during the 28 days leading up to your application
  • meet packaging and labelling rules

The composition requirements for unsalted butter are that it must have a:

  • minimum butter fat content of 82% by weight
  • maximum non-fat milk solids content of 2%
  • maximum water content of 16%

Salted butter composition requirements are that it has a:

  • minimum butter fat content of 80% by weight
  • maximum non-fat milk solids content of 2%
  • maximum water content of 16%
  • maximum salt content of 2%

Read details about the PSA scheme for butter on the RPA website.

Further information on internal market schemes

Below are details of organisations that can offer advice on EC intervention and PSA schemes.

One of the major roles of the Department for Environment, Food and Rural Affairs (Defra) is to help the farming industry operate as efficiently as possible. Defra administers European support policies that provide around £3 billion to UK agriculture. They also oversee a number of agencies that work with arable farmers, imports and exports of crops, and implement pest and disease controls. You can call the Defra Helpline on Telephone: 08459 33 55 77.

The RPA is responsible for licences and schemes for growers, as well as for running the Single Payment Scheme (SPS). For more information about the SPS and how it can help your farming business, you can call the RPA Helpline on Tel 0345 603 7777.

You can also read the guide on the SPS.

In England, the Farm Advisory System advises farmers about cross compliance. For further information call the Cross Compliance Helpline on Telephone: 0345 345 1302.

You can also read the guide on cross compliance: the basics.

The National Farmers Union (NFU) represents the farmers and growers of England and Wales. It aims to promote successful and socially responsible agriculture and horticulture, while ensuring the long-term viability of rural communities.

You can read about the work of the NFU on the NFU website.

Farmers are likely to come into contact with local authorities over a number of farming, land use, food standards and environmental regulations. Your local authority may also be able to provide further information or resources.

Further information

RPA Dairy Intervention Enquiries

0191 226 5219

RPA Cereals Intervention Helpline

0191 226 5882

RPA Private Storage Aid Enquiry Line

0191 226 5060

RPA Customer Service Centre

0345 603 7777

Defra Helpline

08459 33 55 77

RPA Helpline

0345 603 7777

Cross Compliance Helpline

0345 345 1302

Intervention schemes explained on the RPA website

PSA guidance on the RPA website

RPA registration information on the RPA website

Cereals intervention scheme guidance on the RPA website

Download form CEPU1 to offer to sell cereal into intervention from the RPA website (PDF, 69K)

Download the RPA’s detailed information on selling your cereal into intervention from the ADLib website (PDF, 856K)

EU dairy market information on the Europa website

Intervention butter news and tender notices on the RPA website

Butter intervention forms and information on the RPA website

SMP intervention scheme guidance on the RPA website

EU dairy market information on the Europa website

Intervention SMP news and tender notices on the RPA website

PSA trader notices on the RPA website

Download RPA PSA information from the ADLib website (PDF, 113K)

Butter PSA scheme trader notice on the RPA website

Cross compliance information on the Cross Compliance website

Farming advice on the NFU website

Published 7 September 2012
Last updated 13 March 2015 + show all updates
  1. The contact number for Private Storage Aid and dairy intervention has changed.
  2. Fixing references to specialist guides
  3. First published.