Glanbia’s planned peak milk supply management mechanism is “effectively the first step towards a milk quota”, according to the Irish Farmers’ Association (IFA).
According to IFA president Tim Cullinan, the move will cost the processor’s suppliers money, due to farmers being encouraged to increase supply at non-peak times, thus increasing costs.
Yesterday (Monday, March 15), Glanbia announced a temporary mechanism “to manage the rate of growth in peak milk supplies from next year” – which will see suppliers needing to rein in increases in milk supply during peak season next year.
“The company [Glanbia] has a responsibility to its suppliers. It will be farmers who are developing and potential future entrants to dairying who will carry the can,” Cullinan claimed.
He added: “Dairy expansion has given a huge boost to the rural economy, allowing farm families to have a sustainable future. Now farmers again find their business ambitions restricted.”
According to the IFA president, dairy farmers have invested over €2 billion since 2015, while processors have invested a similar amount in new facilities.
“If farmers are being asked to shift their milk supply pattern away from the most efficient time of the year, then they must be properly compensated,” Arthur argued.
He added: “There are also fundamental questions about how this decision impacts on the Milk Supply Agreement between farmers and Glanbia.”
Arthur asserted that the move from Glanbia “appears to be a two-tier milk pricing policy”.