Supply controls vital for dairying
SUPPLY controls or market management mechanisms will be required for the dairy sector if producers and consumers are to be protected, Connacht Gold chief executive Aaron Forde has claimed.
Mr Forde told a 'Forum on Farming' meeting in Claremorris, Co Mayo, last week that the level of price volatility seen over the past two years had the potential to destroy the production base and markets for dairy produce if it was not controlled.
Characterising low milk prices as "producer destructive" and high dairy product prices as "demand destructive", he said a method of dampening these market swings was needed.
"What form this takes, I don't know. Maybe supply contracts are an option," Mr Forde commented.
He warned that producers would not stay in business if milk prices failed to provide a fair return to farmers for their investment and labour.
"We have to reach a point where the prices cover the cost of production and leave a margin or our production capacity will be destroyed," Mr Forde told the forum.
He said milk producers in New Zealand, the US and across the EU had all been operating at, or below, the cost of production last year.
ICMSA president Jackie Cahill warned of "Armageddon" in the dairy sector if policy makers failed to learn from the lessons of last year.