Farm Ireland

Tuesday 23 October 2018

IFA call on Creed to oppose Commission plans to change rules for intervention buying

EU Commission set last week’s price at €1190/t, around €100/t less than feed-grade powder

Phil Hogan
Phil Hogan
Ciaran Moran

Ciaran Moran

The IFA has called on the Minister for Agriculture to oppose proposals by the European Commission to change key rules of the EU dairy intervention measure.

IFA National Dairy Committee Chairman Tom Phelan has said that, rather than changes to the SMP intervention buying-in rules, it would be far more important for the EU Commission to develop an effective strategy to dispose of the 380,000t intervention stock of SMP currently overhanging dairy markets. 

Tom Phelan called on Minister for Agriculture Michael Creed, who will be discussing this topic with his EU colleagues at the next Agriculture Council on 29th January, to insist on an intervention management policy that will minimise pressure on dairy product prices during 2018, and will not undermine a proven market management tool into the next CAP.

“It is proving very difficult to sell this stock. Just over 2000t of SMP was sold out of intervention in the last 16 months, of which 1864t last week. Based on the bids received, the EU Commission set last week’s price at €1190/t, around €100/t less than feed-grade powder - by any measure an unsustainably low price,” Mr Phelan said.

“The large stock of intervention SMP is depressing fresh prices to unsustainable levels, when production is actually down 5% in the EU, and the supply/demand balance for the fresh product would justify higher prices,” he added.

“The EU Commission is seeking approval from the Agriculture Council to change the rules for intervention buy-in in a manner which could further depress prices,” he said.

“Minister Creed must insist that the integrity of the regulations, and the safety net they provide, are preserved, especially as intervention is a key market management tool with a proven track record of helping rebalance market disturbances,” he said. 

“The Minister must also demand new thinking in the EU when it comes to the disposal of the accumulated intervention stock, to minimise pressure on dairy product prices. All potential uses which optimise its value must be considered, including non-food uses,” Tom Phelan said.

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Agriculture and Rural Development Commissioner Phil Hogan recently said skimmed milk powder remains an issue and added that it is being used by some people in the trade in order to “talk down prices in the market place”.

“We are working on proposals and we have learned from the 2009 experience when we had quotas and we had 250,000t in storage at that point even with quotas.

“We have to manage this well so that we don’t drive down the price to the farmer. We have rejected all tenders on the market place that have been offered.

“We are working with third countries and various schemes are being evaluated to see what we can do to manage this particular issue over the next year or so that will not damage the price to the farmer,” Hogan said.

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