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Superlevy could hit €100m: ICMSA


ICMSA's Pat McCormack

ICMSA's Pat McCormack

ICMSA's Pat McCormack

Superlevy predictions continue to increase on the back of fine grazing conditions this month, with the ICMSA suggesting a penalty of €100m for Ireland following the confirmation by the Department of Agriculture last week that the country was more than 5pc over quota at the end of February.

Estimated butterfat adjusted deliveries in February were up 2m litres compared to last year, at close to 233m litres. Twelve months ago, Ireland was just 1.26pc over quota.

The ICMSA is appealing to farmers that are still under quota to join a national effort to hold milk over until April 1 when the quota regime ceases.

ICMSA dairy chairman, Pat McCormack, has also asked milk processors to encourage all their suppliers to hold back supplies wherever possible.

"A superlevy fine of €100m would be a massive drain from rural Ireland at a time when milk price is 9c/l, or 30pc, lower than March 2014 levels, with the consequent 'knock-on' effect on rural spending," he said.

"Despite concerns about the need to divert additional governmental resources to address the problems of rural Ireland, the EU is preparing to drain what could be €100m from the rural economy this spring on foot of a system that operates up to midnight on March 31 and is consigned to history five minutes later. It is a frankly ridiculous scenario, and the fight to remove or mitigate the superlevy fine must go on," he said.

Meanwhile, the ICMSA has issued a guarded welcome to Glanbia's proposal to set up a €68m Member Support Fund.

"There would always be a degree of apprehension that any kind of subvention or cross-subsidy might lessen the obligation on Glanbia Ingredients Ireland (GII) to 'always and ever' pay the maximum milk price possible to its milk suppliers," said ICMSA president John Comer.

He welcomed the commitment from GII that any price support from the co-op would be shown as a distinct item and listed separately on the farmers' milk statements, in order to allow a clear comparison of the GII milk price with other co-ops.

"We have received solid commitments about how they will be calculating their milk price going forward, with clear transparency of where the monies are coming from," he said.

Mr Comer added that while ICMSA had yet to gather a detailed response of its Glanbia supplier membership, that there was little else to disagree with in the Glanbia proposal.

"We understand completely the concept of the Member Support Fund, setting aside funds for use in the hopefully unlikely event of a sudden plunge in milk price similar to the disaster of 2009, but there's always the nagging suspicion that any kind of 'rainy day' subvention of cross-subsidy lessens the absolute imperative of delivering the maximum milk price that our members need each and every month," he said.

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