The Irish Creamery Milk Suppliers’ Association (ICMSA) has claimed that co-op sustainability schemes are locking farmers into anti-competitive input pricing.
There is a “very strong commitment” among farmers to proactively pursue more sustainable farming practices and technologies, according to the co-op.
However, the association said that farmers are becoming wary of schemes aiming to help this commitment as they “seem to amount to nothing but anti-competitive pricing and data harvesting”.
ICMSA
ICMSA president Pat McCormack said that “suspicion was growing” that many co-ops are using farmers’ drive for sustainability to “lock them in” to anti-competitive arrangements.
“Farming is a business of tight margins and farmers are entitled to buy their inputs from the most cost-efficient source they can find,” he said.
“Obviously, farmers will support their own co-op in the first instance – provided the price is competitive and provided the farmer is not being forced or compelled under various schemes to purchases inputs from their co-op.”
McCormack also said that there were concerns about “data-sharing arrangements” being built into some sustainability schemes.
“Farmers have a right to expect a certain level of privacy and we would think are entitled to question the need for some of these data-sharing arrangements.
“Milk processors have become very good at requesting and sharing farmer data, but when you ask a co-op about their own margins, for example, you’ll hit a wall of silence.
“We need to see a level of fairness and reality brought to these schemes,” he said.
The ICMSA president said that dairy farmers are becoming increasingly irritated and concerned about being effectively compelled to buy inputs from their own co-op.
“If co-ops want to pay bonuses to farmers for purchasing inputs from that co-op, then they should be upfront about it and not hide it behind the pretence of sustainability schemes,” McCormack said.