| 9°C Dublin

IDB offers to part-fund quality assurance plan

The Irish Dairy Board (IDB) is considering part-funding a new quality assurance scheme for the dairy sector.

The initiative is being viewed as a compromise solution to the impasse that has developed over the proposed imposition of a new dairy marketing levy.

The marketing levy was initially announced by the Minster for Agriculture, Simon Coveney, in the Budget as part of the overall spending review for his department.

The statutory levy of 0.1c/l would generate €5m in funding, which was to be ring-fenced for the development of new markets to take the expected increase in dairy output post-2015. The marketing strategy was to be handled by Bord Bia. However, the farm organisations opposed the move, pointing out that milk suppliers already paid 0.14c/l to fund the IDB and that they were not willing to pay a second marketing levy.

Under the new proposals, which were discussed by the IDB at board level, member co-ops would agree to pay €1.2m to fund a new quality assurance scheme.

Co-op funding could be by way of a voluntary levy, but this was not agreed. The total spend on the scheme would be €2.4m and the remaining €1.2m would be funded by the Government.

The detail of the package has not been thrashed out but the proposals are seen as offering a compromise solution to the dairy levy issue and one that could be sold to dairy farmers as a necessary step. One processor source said that the IDB discussions had focused on the quality assurance scheme and that there was no mention of marketing. However, the IFA has insisted that the development of a dairy quality assurance and sustainability scheme must not give rise to an additional farmer levy.

"The minister, the processing industry and the Irish Dairy Board have to find ways between them of funding the proposed scheme," said Kevin Kiersey, IFA dairy committee chairman.

He said farmers would have to prioritise on-farm investments of up to €1.5bn to deliver on the Food Harvest 2020 expansion target of a 50pc growth in output.

"I am very clear that the funding options between the processing and marketing industry and the Department of Agriculture which are currently being explored will not give rise to any additional farmer levy."

While beef farmers have never been required to pay directly for being audited for a quality assurance scheme, it is believed that it costs somewhere between €100-150 per farmer per year to operate.

The carbon footprint audit has been incorporated into this audit as a desktop exercise, based on the key performance figures of the farm involved. The dairy audits that have already been piloted by Glanbia follow a similar structure.

Dairygold CEO Jim Woulfe has already stated that a quality assurance scheme for all his suppliers was being finalised. Glanbia will be rolling out its quality assurance/carbon audit to all of its suppliers over the coming year.

Indo Farming