Coveney under fire over sharp fall in milk price
Farmers up in arms at the 'battering' of farm incomes since the abolition of dairy quotas
Published 16/08/2015 | 02:30
Agriculture minister Simon Coveney is under fire after milk prices have plummeted across the country following the abolition of milk quotas.
Farmer lobby group the Irish Creamery Milk Suppliers Association (ICMSA) has said that falling milk prices have taken €1bn out of the rural economy, with Mr Coveneny's home country of Cork down €263m alone.
Mr Coveney and his Cabinet colleagues have come under pressure to intervene as farmers have claimed that they are seeing their incomes become incredibly volatile, with falls of up to €40,000 a year being experienced.
Research conducted for the ICMSA by economics professor Alan Mathews of Trinity College Dublin (TCD) ha shown the price per litre in Cork falling from 38.4 cent to 28 cent.
Deputy president of the ICMSA Pat McCormack has said that the current period of falling milk price is inflicting a "battering" on the rural economy.
He estimates a total drop in spend of "well in excess of €1bn" compared to last year and he warned that current government and EU policy complacency means that these kinds of enormous losses could continue into next year.
Mr McCormack said he was becoming increasingly alarmed by what he termed the "sleepwalking attitude" being displayed by both the Department of Agriculture, Marine and Food and, even more so, by the EU Commission. He said that when the losses are presented on an individual county basis they become extremely alarming.
Speaking to the Sunday Independent, Mr McCormack said: "ICMSA has always urged politicians and policymakers to grasp the basic fact that where farm incomes take the kind of battering, you see massive falls in the wider local economy as the farmers stop purchasing goods and services in their local communities."
Based on calculations, the ICMSA expects that just Cork - which accounts for a quarter of all the milk produced in the State - will see a drop in spending of in excess of €263m through direct reduction in milk price and the multiplier effect that sees that milk price spent in local communities.
Tipperary will see a fall of probably €111m; Limerick will probably be down about €85m; Kerry down by nearly €78m and Kilkenny around €57m. "This isn't 'income-falling' territory anymore, in many cases this is 'income-disappearance' for the milk suppliers with measurable and very destructive knock-ons for their local rural economies," Mr McCormack said.
Mr Coveney has confirmed he will seek an EU milk price intervention but only when the timing benefits Irish farmers.
Mr Coveney said they were keeping a close watch on milk prices on a "daily basis", as he launched the TAMS II dairy equipment scheme which will offer €50m over a six-year period. He said: "I don't think we should panic into demanding a response that won't benefit Irish farmers immediately and may ultimately cost Irish farmers because remember this comes from the EU Crisis Reserve Fund which is contributed to by farmers' Single Farm Payment," he said, adding he was talking to Commissioner Phil Hogan about it regularly.
"Of course, if the time is right, I will aggressively be calling for intervention whether it is in the form of Aid to Private Storage (APS) or whether it is intervention pricing."
However, the minister said he did not want intervention prices to be subsiding the price in other countries.