The EU Commission has sad that the dairy industry of Ireland will have to pay a fine of €16 million for producing more milk than the limit set by quota.

Officials said that the farmers will have to pay a "superlevy" penalty of €16 million because they produced more milk than allowed. According to estimates, the farmers might have to pay a fine of €18,000 each for producing extra milk.

The fine will range from hundreds of euros to a level above 10,000 for some larger producers in the country. The good weather during the 2011-2012 milk quota year led to a bumper growth for grass and resulted in higher milk production for farmers in a year when the milk prices were tentatively high.

Ireland produced 60,000 tonnes more milk than its quota in the previous year. It was among the six countries that exceeded its limits for production in the year. However, the total EU milk production was actually 5 per cent below the maximum level.

The European Union milk quota system was introduced 30 years ago to limit milk production and the EU offered higher prices to farmers. The system is set to be abolished in the year 2015.