Farm Ireland

Saturday 18 November 2017

Furious farmers label milk levy plans a 'direct attack' on Irish Dairy Board

Declan O'Brien

Declan O'Brien

Plans by the Minister for Agriculture, Simon Coveney, to introduce a new dairy marketing levy in the new year have provoked furious opposition within the sector.

The levy of 0.1c/l will fund a specialised dairy marketing section within Bord Bia whose role will be to develop new outlets for extra dairy produce post 2015, in emerging markets in Africa, Asia and the Middle East.

However, the move has been branded a direct attack on the Irish Dairy Board (IDB) by some within the industry.

The IDB, which is owned by the country's dairy co-ops, is funded by way of a 0.14c/l levy on milk supplied to member co-ops and currently markets around 60pc of Ireland's dairy exports.

While farm organisations insist that they will not pay two milk marketing levies, many within the industry view the minister's announcement as a direct threat to IDB.

In a strongly worded statement, ICOS, the umbrella body for all dairy processing co-operatives, has come out against the proposal.

ICOS president Pat McLoughlin claimed that the "unwarranted levy" had been announced on "a whim".

"It may be more the case that the minister needs to cut operational budgets for the agencies under his remit.

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"To fill that gap he must find funds from every other source, and in this case he is intent on placing a new levy on milk production," Mr McLoughlin said.

"The minister also made an astonishing comment that the Irish Dairy Board is a 'private organisation that does not represent all dairy farmers'.


"In saying that, he has somehow failed to note that the Irish Dairy Board is a co-operative enterprise owned by Irish dairy processing co-operatives and dairy companies and through them by Irish dairy farmers."

Mr McLoughlin pointed out that the IDB had an international dairy brand in Kerrygold and any moves to bring Bord Bia into the marketing function for dairy produce would result in duplication of marketing effort.

Kevin Kiersey, of the IFA, said it made no sense to waste scarce resources, adding dairy farmers were not going to pay on the double.

The chairman of ICMSA's dairy committee, Pat McCormack, said the reaction from his organisation's members to the announcement of yet another levy had been "extremely negative".

Mr McCormack said farmers were again being asked to stump up for 'additional' work to be carried out by a Government agency that any reasonable observer would have thought was already an integral part of the Government agency's remit.

Sources within the dairy sector have questioned the motives behind Mr Coveney's announcement.

"Dairy farmers are not happy about this. They don't think it's good for the dairy industry as a whole and it's not good for dairy farmers," another leading dairy farming representative said.

While he admitted there were "difficulties" within the IDB, he said Bord Bia had no experience in direct sales and he predicted that this would prove a major weakness in the minister's plan.

"Bord Bia hasn't sold one ounce of Irish beef. They've promoted and marketed it but the beef companies had to do the hard sell," he said.

"If Bord Bia take the same approach to dairy markets, we'll have all the dairy companies scrambling after these new outlets and competing with one another for contracts. This could fragment the dairy business further."

The IDB, ICOS and the farm organisations are expected to hold a series of meetings this week to tease out the implications of Minister Coveney's plan.

Although selling outside the IDB will certainly suit many processors, Mr Coveney's proposal caught the industry by surprise.

"We need a very clear and detailed business plan if we're expected to back this," one processor representative said.

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