Exports of Irish dairy produce have been described as “collateral damage” in trade tensions between the EU and China.
The Irish Creamery Milk Suppliers’ Association (ICMSA) said that the dispute between the EU and China is “completely unrelated” to Irish dairy.
Earlier today, the Ministry of Commerce in China announced that it had begun an investigation into “subsidies” paid to European dairy farmers.
The basis for the investigation is that certain subsidised EU dairy products allegedly impact on China’s domestic dairy industry.
That application claimed that certain EU dairy products received subsidies from the EU and its member governments, and that the EU dairy industry “may benefit from a total of 20 subsidy projects”.
One of the subsidies referenced was an Irish scheme the Chinese authorities called a ‘Dairy Equipment Subsidy Scheme’, likely a reference to the Dairy Equipment Scheme under the Targeted Agricultural Modernisation Scheme (TAMS).
Commenting on these developments, ICMSA president Denis Drennan said: “Irish dairy products might end up as a collateral damage in a trade war that is most assuredly not of their making”.
“The idea that, for instance, Irish butter or powders were, in any fashion, the beneficiaries of state support or funding would be comical if the situation was not serious,” he said.
At present, the Chinese investigation is not understood to impact powdered milk or butter, but will apply to various types of cheeses, as well as liquid milk and cream.
However, news of the investigation is nonetheless unwelcome to the Irish dairy industry.
Commenting on the claims of subsidies or state funding benefitting the Irish dairy sector, Drennan said: “If you suggested to an Irish dairy farmer that [they were] in receipt of state funding towards the retail price of his product, he or she would laugh in your face.
“If anything, the Irish government’s policies work as a penalty in our sector and, so far from aiding, they actually deduct from our ability to sell successfully abroad,” he claimed.
“Food exports are being held hostage in a dispute that is not even tangentially related to our sector.
“The loss – or any kind of negative impact – of exports…would be a savage blow at a time when our primary dairy-farmer producers are reeling from low prices, adverse weather and years of high inputs,” the ICMSA president added.
Drennan said that the ICMSA would be “demanding” that the EU compensate farmers in the event that the trade dispute does impact on the trade of Irish powdered milk and butter to China.