Concerns over potential EU SMP intervention change

Reports that the 2018 intervention for skimmed milk powder will be via tender rather than the current regulation price of €1,690/t are deeply concerning, according to Fianna Fail spokesperson on Horticulture and Food, Jackie Cahill.

Deputy Cahill was commenting on reports from the dairy sector that the European Commission is planning on changing the payment structure for dairy farmers.

“While prices have stabilised, and marginally improved in certain areas, the price for skimmed milk powder has not.

“The regulation price put a floor under the market, and ensured that dairy farmers had certainty with price, and could plan accordingly.

Any moves by the EU Commission to move to a tender model will pull that floor from under dairy farmers, and may see prices plummet.

“I’ve tabled a parliamentary question to the Minister for Agriculture and Food, Michael Creed, asking for him to make a statement on this matter.

“I will be asking him to categorically state Ireland’s opposition to such a change in policy, and ensure that the commission do not proceed with,” the deputy said.

“A change of this nature would put Irish dairy farmers under severe pressure. Dairy prices haven’t recovered sufficiently to make up for the major losses incurred over the past five years. Minister Creed must call a halt,” concluded Cahill.

Voluntary reduction scheme

Gerald Quain, chairperson of the Irish Creamery Milk Suppliers Association’s (ICMSA’s) Dairy Committee also commented on such reports, noting that the ICMSA was quite concerned with the prospect.

It’s not too much of a problem when the milk price is high, but it becomes a big issue when price drops, the chairman noted.

However, Quain said, it is expected and hoped that a new voluntary reduction scheme will be put in place next year – which will reduce the need and dependence on a tool like the intervention price. At present, just the intervention is in place.

A new voluntary reduction scheme would be a much cheaper option than intervention as well, the chairman said, referencing the success of the last scheme.

The ICMSA would prefer for the structure to remain unchanged along with the introduction of the expected scheme, Quain said, cautioning that if the change was made to a tendering process it would be “putting volatility on top of volatility”.

However, if the scheme is introduced, this should reduce reliance on intervention, the chairperson concluded.

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