Margaret Donnelly: 'The debate about Ornua's future is long overdue and good news for farmers'

Dairygold CEO Jim Woulfe. Pic Daragh Mc Sweeney/Provision

Margaret Donnelly

Dairygold CEO Jim Woulfe. Pic Daragh Mc Sweeney/Provision

Margaret Donnelly

Margaret Donnelly Twitter Email

July 23 2019 06:00 AM

The debate about the proposed overhaul of Ornua should be welcomed and not seen as a distraction for those involved.

It's understood that the Dairygold proposals were outlined in a presentation delivered by the co-op's CEO, Jim Woulfe, at the last Ornua board meeting, and although sources insist no details of the plan were known before the meeting, most admitted that there was little "shock" when Mr Woulfe addressed the gathering.

It's no surprise either that the proposed level of farmer ownership in Ornua is proving contentious.

The share spin-out is being sold as a mechanism to give greater control of Ornua to farmers, but some co-op board members are understood to have asked why farmers have been offered just 20pc of the Ornua shareholding, while the co-ops receive 80pc.

If the overhaul is about farmers having a stake in the marketing of their produce, then why are they only getting one-fifth of Ornua?

The value of Ornua is an estimated €500m, so €100m is earmarked for farmers under the Dairygold proposals.

Since Kerry Group suppliers do not qualify for shares, the farmer stake in the business - under the current plan - is worth an average of €7,500 for the 13,500 eligible milk suppliers. This equates to around 2c for every litre of milk delivered in 2018.

However, it's the attitude of the farm organisations and ICOS to the Ornua initiative that will be crucial to its success or failure.

Both the ICMSA and IFA have been reluctant to comment, with the latter saying it's important the board is given the space and time to evaluate all options in the best interests of the Irish dairy sector.

Whether the Dairygold proposal is the way forward for Ornua remains to be seen. At the very least, it has kick-started discussions around fundamental change at the country's largest dairy exporter.

And that change is needed. The differences at board level within Ornua have been well documented. The general consensus is that these difficulties have undermined and stymied the board's work.

It is reported that efforts to patch up these differences were "going nowhere" so a radical change of direction may be what is required.

There has been some disquiet around the leaking of the restructuring proposals, but it's only right that farmers be kept informed of changes which could totally transform the organisation tasked with selling their produce.