‘Milk Supply Reduction Scheme must not be hindered by processors’

A level of confusion has arisen in relation to the Voluntary Milk Supply Reduction Scheme that needs to be cleared up, according to Gerald Quain, Chairperson of the ICMSA Dairy Committee.

He made the comments following letters received by co-op members in the post in the last week.

Firstly, Quain said that the 14.4c/L is set in stone and will not change even if the scheme is oversubscribed. “To suggest otherwise is totally misleading and incorrect,” he said.

He said in the event that the scheme is oversubscribed, the farmer will receive a reduced volume. For example, Quain said, that if a farmer applies for 10,000L and the scheme is oversubscribed by 10%, the farmer will receive an allocation of 9,000L.

This means that the farmer will receive a payment of 14.4c/L on 9,000L instead of the 10,000L he/she applied for and the farmer can supply the extra 1,000L if he/she so wishes.

Secondly, Quain said there is wriggle room if the farmer does not meet the target volume reduction.

“The scheme regulations has a built in volume reduction element if farmers do not hit their reduction target.

“If a farmer comes within 80% of his/her target, he/she will get paid 14.4c/L on every litre he/she has not produced. Even if the farmer is below 80%, a co-efficient applies and there is still no reduction in the 14.4c/L full stop,” he said.

Thirdly, Quain said a farmer can apply for the voluntary reduction scheme and will also be eligible for the €11m scheme when put in place.

Indeed, Quain said, that one of the qualifying criteria for the €11m scheme is participation in the Voluntary Reduction Scheme and he said it is disappointing that the Department has failed to clarify the position on this matter.

Finally, he said payment under the scheme must at the latest be the end of March but the Department can pay earlier and there is absolutely no reason why this payment cannot be made by the end of January.

Quain said each farmer must look at the scheme on its own merits as it could be an attractive alternative if cows were to be dried off earlier.