A Voluntary Supply Reduction Scheme should now be implemented in Ireland and across all EU Member States to bring the dairy market back into balance, according to ICMSA President John Comer.
The new Minister for Agriculture, Food and the Marine, Michael Creed, has been called on to implement such a scheme by the body representing Irish milk suppliers.
ICMSA believes that with financial pressures growing at farm level and with no prospects of improved milk prices in the short term, unprecedented action is going to have to be taken at EU level to bring the market back into balance and to give farmers viable options.
Comer said that it’s very clear at this stage that farmers have been effectively abandoned to take the hit alone from the downturn in the dairy markets.
“All other links in the supply chain are insulating themselves and policy-makers at both national and EU level are allowing and assisting them to do so.”
Corporate retailers are taking advantage of increased global milk supplies and are now relentlessly paying lower for product while maintaining their own retail price to the consumer.
“The European Commissioner had committed to addressing the power of the multiples and giving more power back to farmers but this hasn’t happened and retail corporations are now openly profiteering from the wipe-out of farmers’ incomes.
“As for the processors, while their profits may fall they will still return a profit in 2016 and so we’re left with the only player in the supply chain who will be losing money: the farmer.”
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The ICMSA President said that people will argue over the cost of producing milk, but the generally accepted figure is 28c/L excluding farmers’ own labour costs and we have been below this level for almost a year now with no prospect of a turnaround in the short term.
This just can’t go on and policy-makers telling farmers that this is simply a trough in the market, to cut costs and to restructure loans to survive is simply pointless.
“Repayment capacity has been wiped out and even if loans were restructured, many farmers simply cannot survive at these prices levels.
“What we need is a viable milk price that, at a minimum, covers the cost of production and this is what policy-makers need to concentrate on.
“Recent EU Farm Council meetings have been ignoring the facts of the marketplace, their decisions have not worked and it is about time that decisions were taken based on facts.”
Comer said that the problem on dairy markets at present is the excess supplies of milk – particularly in the EU.
“Such a scheme should be replicated across the EU with additional EU funding being made available to implement it.
“This would be a totally voluntary scheme and any farmer who wishes to continue to expand must be able to do so.”
The ICMSA President said he had no doubt but that this proposal would be criticised but he said the onus was very clearly on such critics to spell out their alternative as presently the only policy being pursued is to simply cut milk prices to farmers till supplies balance demand.
“This isn’t a policy – it’s a step-by-step destruction of our priceless family dairy farm system and the new Minister needs to realise this.
“There has been way too much emphasis on 2020 and 2025 targets and not enough on this week, next week, next month and next year and we need see that being recognised.
“Individual farmers need to be given options and ICMSA believes – given the flat refusal of the Commission to raise the intervention price – that a voluntary reduction scheme, with the emphasis on the word ‘voluntary’, is the only option that will bring the market back into balance quickly.
“And at this stage of income destruction, every day matters,” Comer concluded.