Guidance

Selling milk direct to the customer

Find out how you can sell milk direct to the customer under the Milk Quota Scheme.

This guidance was withdrawn on

The Milk Quota Scheme ended on 31 March 2015.

If you wish to sell milk direct to the customer, you must register with the Rural Payments Agency (RPA) to hold a milk quota to market as direct sales.

Direct sales quota

‘Direct sales’ covers the production, processing and marketing of milk and/or milk products within a single legal entity. The term ‘marketing’ of milk and/or milk products includes milk that is given away for consumption off the holding whether by humans or animals.

Direct sales also covers milk or milk products which are sold on the holding, for example in a farm shop or cafe. If you have any doubts as to whether your milk production qualifies as direct sales, contact the RPA’s Milk Quotas Section on: 01392 315763.

What is not classed as direct sales

Contract processing is not included within the definition of direct sales, neither is the delivery of bulk pasteurised whole milk for further processing. If a separate organisation is processing your milk, this is classed as a wholesale transaction.

How to apply

You should contact RPA’s Customer Registration team for a Single Business Identifier (SBI), and a trader registration number.

You should use your trader registration number on all correspondence with RPA and all milk quota forms. You should also use this number when contacting RPA’s Milk Quotas Section.

Records you must keep

Under Schedule 2 of the Dairy Produce Quotas Regulations 2005 (as amended), a dairy farmer selling milk direct to the consumer must keep records for at least 3 calendar years after the quota year to which they relate. Monthly records must cover a calendar month.

Failure to maintain the records will result in a penalty being raised under the relevant regulation within the Dairy Produce Quota Regulations.

Annual declaration

If you make direct sales, or hold direct sales quota at any time during the quota year, you must submit an annual declaration on MQ 15 Annual declaration of direct sales (PDF, 179KB, 4 pages) to RPA. Guidance on completing your annual declaration of direct sales. (PDF, 225KB, 15 pages)

At the end of the quota year, a direct sales package (includes a form MQ/15) is issued to everyone who held direct sales quota during the year. If you make direct sales but do not hold direct sales quota, you will not automatically be sent a form.

First product produced

The first product produced from any given batch of milk that leaves your holding will determine what is declared on your annual declaration.

You must declare the whole milk equivalent of the first product to be marketed. For example, if you make cheese, and any of the by-product whey leaves the holding before the cheese, it is the whole milk equivalent of the whey that should be declared.

If you separate your milk into skim and cream, you must declare the whole milk equivalent of the first product which leaves your holding.

What is not included in the annual declaration

Whole milk is not counted against quota if:

  • used on your holding to feed stock
  • used for domestic consumption
  • wasted or thrown away on the holding

Contact the RPA’s Milk Quotas Section on: 01392 315763 for further advice on measuring direct sales of milk against quota.

Penalties

If you fail to submit your annual return MQ/15, a penalty will be applied.

Guide to Milk Quotas

Detailed information about the scheme is given in the ‘Guide to Milk Quotas’, which can be downloaded in English or Welsh:

Guide to Milk Quotas (English)

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Guide to Milk Quotas Appendices (English)

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Guide to Milk Quotas (Welsh)

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Guide to Milk Quotas Appendices (Welsh)

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Published 31 March 2014