The Irish Creamery Milk Suppliers’ Association (ICMSA) is calling on the government to back a new financial scheme which it believes could play a key role in reducing “farm income volatility”.
Pat McCormack, president of ICMSA, believes there is a need for a scheme, designed specifically to help farmers in “bad years”.
McCormack said today (Wednesday, October 4) that the ICSMA has identified “excess volatility in farm incomes” as a key challenge.
The organisation’s answer to this challenge is an income scheme – supervised by the Revenue Commissioners – that enables farmers to ‘deposit’ monies during what it has described as the “good” years and then “draw them down in bad years”.
McCormack said: “The year 2022 saw relatively strong milk price but that has collapsed in 2023 and as of now, farmer milk price is hovering around breakeven with the cost of production.
“Our scheme, the Family Farm Fairness Mechanism, would have allowed farmers to deposit any surplus from last year’s strong price and access it this year to supplement the near 25c/L fall in milk price and consequent collapse in overall dairy farm income.”
He said the ICMSA has provided details of its scheme to the government in its pre-budget submission.
“It’s the obvious answer to an obvious problem and is completely within the control of the Revenue Commissioners, but for reasons only known to themselves, successive governments have chosen to ignore an answer to excess and destructive farm income volatility that’s sitting there in plain sight,” McCormack said.
According to the ICMSA there are schemes, similar to the one it has proposed, already in operation in France and Australia.
The organisation’s president believes that Budget 2024 now presents the government with an opportunity to address the challenges facing some farm families and that it should introduce a new “farm income volatility measure”.
McCormack said that dealing with uncertain incomes causes “worry and anxiety” for farmers and their families.
“Farmers could be up by 20% or down by 50% and that volatility hangs over every decision that they will have to take today or tomorrow.
“We could alleviate some of that so easily by looking at our scheme and do it in a way that ensures that every cent due to the state in taxation is paid under the state’s direct supervision,” he added.