A time of challenges and opportunities
Published 01/04/2015 | 02:30
Like all new dawns, there are now opportunities and challenges for Irish agriculture as a result of an open market for milk after 31 years of restrictions imposed by the milk quota system, which was introduced on April 2, 1984.
The immediate challenge for the dairy sector is to cope with the so-called 'river of milk' that has built up in recent months as farmers and processors stored millions of litres of milk to avoid super levy payments before the advent last night of open market.
But it is the long-term challenges that are far more important and will tax farmers, milk processors and the Irish Dairy Board, now known as Ornua. With unlimited production across the EU, there is the immediate danger of a fall in the price of milk. But with milk products in great demand in emerging markets, there are also great opportunities in the vast markets of China and India.
How these markets will be harnessed will depend on the farmers and the ingenuity of the Irish Dairy Board. But as both have been preparing for this for months, and indeed years, the transition should be relatively seamless.
The bigger challenge is managing the transition from dairy farms to super dairy farms. There is little doubt that the end of the milk quota will also mean fewer dairy producers. With dairy farmers "blowing everybody else of the water" as they lease land, there seems to be consensus that this bright, new dawn will also spell the end of many of the smaller dairy farmers.
Coping with the changes in dairying will result in an increase in herd sizes, in some cases this will be dramatic.
Such changes will also benefit from the introduction of new technologies - and it is essential that these are harnessed if the Irish dairy industry is to thrive and grow.
As has been pointed out, many of these changes have already been tested in New Zealand, and it is likely that this is where the Irish dairy industry is headed. For town and city dwellers, all of this makes little difference, but in the long term the end of milk quotas has the power to change the face of parts of rural Ireland. That is something that needs to be carefully managed if we are to get the maximum benefit from this momentous event.
More must be done to aid mortgage holders
The Government is under a certain amount of pressure to do something about the high rates of mortgage interest charged to 300,000 holders of standard variable-rate mortgages.
The problem for this group of mortgage holders is that they are ‘carrying’ those who are lucky enough to hold tracker mortgages and those who can avail of discount rates to switch to a new mortgage provider.
It is estimated that the holders of variable-rate mortgages are paying up to €6,000 a year more than those with trackers and up to €1,000 more than those who have availed of discount rates.
Understandably, the banks want to make a profit, but they should not do this at the expense of one group of mortgage holders. On one level at least the banks could be said to be profiteering from this group.
Mortgage holders can switch to another provider for a discount, but Fianna Fáil, in a Dáil debate last evening, were right to call on the banks to be more transparent about mortgages and also for the Government and Central Bank to pressure to reduce the standard variable mortgage rate, which is among the highest in Europe.