Dairy farmers ‘not fooled’ by ‘top-up’ milk price bonuses

Sharp criticism has been pointed at some of the country’s major dairy processors for frequently offering special milk price bonuses in light of the impact of extreme weather events in recent months.

The president of the Irish Creamery Milk Suppliers’ Association (ICMSA) has again blasted what he describes as the “undermining effects” of discretionary bonuses or payments on base milk price.

Various processors including: Glanbia Ireland; Aurivo; LacPatrick Dairies; Lakeland Dairies; Dairygold; and Kerry have cushioned prices with added weather payments on a number of occasions since the beginning of the year.

Pat McCormack, ICMSA president, told AgriLand that the association is “unhappy and suspicious” of the practice that saw co-ops paying a base milk price that was below that of the Ornua PPI which, he said, was then “topped up” by a cent or two on grounds of “hardship or loyalty”.

The farm lobby group stated that it “rejects” the idea that paying any element of a proper, market-derived milk price could be “discretionary” – with McCormack insisting that farmers want to be paid “a proper price” for the value of their product.

“We do not accept the idea that re-calibrating a minimum base milk price and dividing it into elements that are market-derived and discretionary stands up to any scrutiny at all,” he said.

He stated that this month’s milk price announcements are a case-in-point.

‘Hand-in-cap’ impression

“The Ornua PPI translated across to 32.1c/L – and remember that this is the price already achieved; why then do we have milk processors announcing a base milk price below the PPI and then announcing a ‘bonus’ as if they were doing their suppliers a favour?

Their milk suppliers don’t want or like the impression that they’re standing in front of their co-op with their ‘caps-in-hand’ waiting for the proper market payment at the whim of the processor.

“What they want – and what they’re entitled to – is at least the same price per litre that the processor was paid for their products,” McCormack contends.

As farmers continue to face very serious constraints regarding cash flow and soaring costs due to the detrimental drought and heatwave conditions throughout the summer months, the farmer representative argues this practice is not helping the situation.

It’s as if the farmers are being put in the position of ‘hired hands’ who should be grateful to be getting as a bonus what they should be getting as a right.

“The ICMSA is very conscious of the kind of financial vice-grip that thousands of farmers are in and we know that every cent counts.

“But we’re not fooled at all and we reject and resent this insidious practice of shorting farmers on their proper price and then announcing a ‘top up’ discretionary payment that brings it up to what it should have been in the first place,” McCormack concluded.