Farm Ireland

Sunday 23 October 2016

Viewpoint: Don't let the €4m of extra milk levies be spent on PR

Published 11/11/2015 | 02:30

Milk production is set to increase by a billion litres on the figure for 2010.
Milk production is set to increase by a billion litres on the figure for 2010.

Amid all the debate about dairy expansion, I don't hear much discussion on how the extra milk levies should be spent. Startling figures revealed in this paper last week show that milk production is on course to one billion litres higher this year compared to 2010.

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While the dairy industry deserves a pat on the back for such a meteoric rise, farmers should also pay attention to the detail of where the proceeds from all this extra volume flows, because it certainly isn't all flowing back into their pockets.

We know that up to 0.5c is skimmed off the litre of milk leaving the bulk tank.

It's actually more if you are a liquid milk farmer outside of Kerry - Kerry spring milk suppliers are only paying 0.3c/l courtesy of their co-op telling Ornua where to go with its 0.14c/l levy.

The other skimmers include the National Dairy Council, the National Milk Agency, Department of Agriculture inspectors, TB programmes and Teagasc.

What we don't know exactly - and probably never will - is what the farm organisations take out of the pot.

We know it's 0.15pc of the value of the litre, and I reckon it was close to €2.5m during the quota days.

While it's conveniently concealed under the meaningless 'European Involvement Fund' heading on your milk statement, at least you have direct control over it, with the option to opt out whenever you want.

The total of all the levies together come to a pretty penny - €26m back in 2010, but closer to €30m this year. So what's happening with the extra €4m?

Surely efficiencies of scale allow the Department inspectors cover the extra volumes without much extra work. Isn't that what all the plant rationalisation is supposed to be about?

TB is still with us, but supposedly at historically low levels, which should also generate savings.

Teagasc is one of the few levies that I don't really have an issue with - if the Board doesn't lose the run of itself then more research can only be a good thing.

The rest I'm not so sure about. Does the Ornua salesman need to get the buyer a bigger steak because they have extra tonnes of powder to sell?

The NDC's advertising budget looks to have expanded significantly, with its sponsorship of RTE's two main farming programmes on radio and TV. The national milk supplier awards also got expanded covereage this year. But is this the best use of a 15pc increase in levies? I'm even more dubious about what the National Milk Agency brings to the party, but at least it lowered its levy in 2013.

It would be a shame to see this extra money being devoured by slick PR companies when there are so many pressing issues - not least the ongoing challenge of diseases such as Johnes amd IBR that threaten the long-term future of the industry.

Indo Farming


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