Business Farming

Thursday 29 September 2016

State won't intervene on milk prices

Ann Fitzgerald

Published 10/05/2016 | 02:30

ICMSA president John Comer
ICMSA president John Comer

A measure to incentivise Irish dairy farmers to produce less milk in a bid to control the market would be a "free gift" to our global competitors, a senior official has warned.

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Brendan Gleeson, assistant secretary with the Agriculture Department, said a milk supply control mechanism similar to the measure championed by France would not make sense in the longer term.

Last month the European Commission introduced new rules allowing member states to introduce voluntary supply control measures on a temporary basis. The Department man believes there is "no prospect" of Irish co-ops going down this road and "if they do, there is no prospect of the State paying for it."

However, the ICMSA feels unprecedented action is needed and called for the introduction of a voluntary supply reduction scheme in Ireland and all EU member states as the best option to rebalance the market.

ICMSA president John Comer urged the new Agriculture Minister to bring in a scheme to pay at least 10c/l for every litre less a farmer produces in 2016 compared with 2015.

However, Mr Gleeson emphasised that the issue is complex, pointing out that 20 member states have increased production since the abolition of milk quotas, not just Ireland, which only accounts for 4pc of EU production.

"I see this as a matter for the industry itself to manage. This is a commercial exercise for processors," he told farmers and the agri-industry gathered at the joint IFA and FCStone risk management conference.

His robust rejection was echoed by Bernard Condon, director of dairy trading and ingredients with Ornua, as he pointed out that the French market is more or less self-contained, in contrast to Ireland's dependence on export markets.

Even if voluntary production limits were imposed here, it would not have an impact on global price, claimed Mr Condon.

Without impacting on overall supplies, Irish producers' problems would be compounded by not being able to offset low prices with volume, he added.

However, Mr Gleeson believes the Food Harvest 2020 target of a 50pc increase in production over 10 years will be met. "Though things have been difficult, farmers have been driving on and will drive on," he said.

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