Dairy Industry Ireland (DII) has called for priority Covid-19 testing for “ultra-critical technical staff” as a key first step in the first stage of a three-phase proposal under Ibec’s “Reboot and Reimagine” economic recovery campaign to respond to the aftermath of Covid-19.
The plan underlined the impact of the coronavirus on the Irish dairy and specialised nutrition sector, highlighting the sector’s dependence on export trade – accounting for some 92% of produce – as well as the effective collapse of the food service industry.
“Near-term output from the industry could fall by as much as €2.3 billion in value as a result of falling demand and potential losses in processing capacity,” DII warned.
Broken down into three phases based on time-frames of: the next 100 days; the end of the year; and 2023, the plan outlines the steps needed to be taken to put the sector back on its feet.
- Extend EU supports such as Aids to Private Storage: The belatedly announced scheme was welcome but totally inadequate – needs major extension;
- Back Export Credit Insurance: Allowed by the relaxation of EU competition law, this would protect Irish dairy exports and underpin the market; and
- Prioritise Covid-19 testing for ultra-critical technical staff: This would help ensure that no plant goes down during the dairy supply peak of May and June, which would result in the disposal of milk.
Under the second phase, accounting for actions needed by the end of 2020, a further three actions are called for.
In these, the Government is called on to: extend working capital loans of €550 million to processors to deal with stock carry-over; examine the creation of mutual funds, backed by government industry and farmers to protect against long-term market shocks; and fast-track licensing for critical dairy infrastructure.
Under the last point, DII urges the Government to work with regulators such as the Environmental Protection Agency (EPA) to fast-track licensing for critical dairy infrastructure; to ensure that all milk being produced can be processed.
Finally, under the longer-term third phase of the plan, DII outlines what is needed to support the Irish dairy and specialised nutrition sector sector by 2023.
- Invest further into research and development to drive value-added products: With depleted balance sheets, companies will need assistance to continue research investment;
- Support companies to aggressively meet climate and sustainability target: The climate change and biodiversity agenda will return as the key commercial challenge for Irish dairy at the end of the crisis;
- Expand export opportunities: Enable Irish primary and secondary processing to becomes a key native driver of Ireland’s economic reboot.
In a concluding call to Government, DII said:
“Irish dairy is one of Ireland’s largest indigenous industries and is by far the biggest wealth creator outside of urban areas.
“We need concrete strategic actions to navigate the Covid-19 threat to the industry and towards the reboot.
Irish dairy processing and its suppliers have proven themselves to be very resilient keeping wages and taxes paid to the state as the virus tightened its grip.
“But at present they are now running at a loss and burning through balance sheets and reserves to keep afloat which is not tenable long term,” DII warned.