Farm Ireland

Friday 23 March 2018

Coveney prepared to intervene on milk price

Minister for Agriculture, Simon Coveney, TD Photo credit; Damien Eagers
Minister for Agriculture, Simon Coveney, TD Photo credit; Damien Eagers

Ralph Riegel and Martin Ryan

AGRICULTURE Minister Simon 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.

His comments came as ICMSA president, John Comer, warned it is now clear "the EU dairy sector is in crisis" with milk price down 30pc since 2014.

The farm leader said immediate action is required to address the reality of farm livelihoods as the poor prices could continue for longer than anticipated.

Mr Comer called for pressure on the EU Farm Council "to get serious about the tools at their disposal and immediately raise the intervention prices" to a level that reflects the cost of milk production which is generally accepted to be around 28c/l.

The IFA has, with the EU farm lobby group COPA COGECA, lobbied for a revaluation of the 'safety net' intervention prices for SMP and butter, which currently equate to 22c/l.

However, Mr Coveney insisted dairy farmers should not panic and that a milk price intervention will only be sought when the time is right. He said prices in Ireland were higher than in New Zealand, where they were about 22c/l, and other parts of the EU.

The price reduction is "not a surprise" to farmers and had been predicted, Mr Coveney said as he launched the TAMS II scheme at Tom Walsh's farm in Kildorrery, Co Cork.

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"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.

Mr Comer said dairy farmers acros the EU are facing a massive reduction in their incomes in 2015 and many were facing substantial superlevy bills and post-quota expansion debts. There are signs the growth in milk production across the EU is easing, and producers will be watching tomorrow's GDT auction after a fall of 1.3pc in mid-June.

Trade figures up to May show EU cheese exports are down 12pc, with the Russian ban continuing to have a significant impact.

At the launch of the latest TAMS scheme, Mr Coveney said the dairy equipment scheme will offer support of up to 40pc on development projects, with online applications going live next week.

The first tranche of applications will run for three months before closing in early October.

He said the €400m TAMS II upgrade scheme will benefit all sectors of the industry, not just dairy.

"This is all about efficiency, profitability, sustainability and safety. This is what TAMS II is about," he said.

IFA president Eddie Downey called for all other TAMS schemes to open immediately.

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