Farm Ireland

Wednesday 13 December 2017

ICOS in search of unity on milk quota demise

Co-ops assess all expansion options

Declan O'Brien

Declan O'Brien

ICOS has moved to standardise the approach to be taken by co-ops in the event of milk supplies rising sharply as quotas are phased out over the next five years.

A consultation document has been sent by the ICOS dairy committee to all milk processor members.

It is envisaged that the preferences expressed by processors will inform the approach to be taken by the co-ops as a group.

The co-op body is keen that members adopt a common stance on new entrants to the sector and to expansion of processing facilities.

ICOS milk policy executive TJ Flanagan said dairy farmers and processors needed to redefine their relationship now that quotas were on the way out.

He said this could take the form of a share policy, where farmers received a given number of shares for every 100l of milk supplied.


Mr Flanagan predicted that access to spare processing capacity and the funding of creamery expansion would be critical issues for co-ops in the coming years.

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"It is up to individual co-op boards how they allocate spare capacity but there has to be a standard way of doing this," Mr Flanagan maintained.

"Where there is no spare capacity and concrete has to be poured then some mechanism will have to be put in place to fund this. Contributions will have to be done by some form of share mechanism," he added.

The ICOS official said the cost of building new processing capacity could range from 10c/l to 30c/l.

He insisted that the onus would be on those growing their milk production or entering the business to pay for this expansion and buy access to the increased processing capacity.

Mr Flanagan said it was unrealistic to expect farmers who had no interest in growing their herd size to carry the cost of putting processing capacity in place for others.

He said ICOS was not trying to reinvent milk quotas or exclude young farmers from the dairy sector. "New young entrants are the lifeblood of the industry but access to processing must be funded fairly."

Irish Independent