Dairy intervention prices must be realigned to a producer price equivalent of 28c/L with immediate effect, according to Fianna Fail agriculture spokesman Eamon O Cuiv.

“The current backstop figure of 20c/L is totally nonsensical,” he said.

“I am deeply concerned about the ongoing slide in international dairy prices. And the recent falls registered on China’s stock market is not helping affairs. Any development that reduces the standard of living in that country puts off the day when food buyers in China will re-enter international food markets in any meaningful way.

O Cuiv believes the EU Commission has ample scope to make these changes, given that intervention costings have not been changed in line with farm costings for the past number of years.

“The breakeven milk production price in Ireland is 28 c/L,” he said.

“And we are fast approaching this level of producer return.”

The Fianna Fail representative agrees that volatility will be a key challenge for the Irish dairy sector over the coming years, and particularly so when set against the backdrop of the expansion targets laid down for the industry.

“It’s not for me to comment on the finances of the individual co-ops. But I believe firmly in them having sufficient cash reserves to draw upon during periods of weak market prices, rather than having to secure external credit facilities.

“One way of allowing this to happen is to encourage greater shareholder investment in the co-ops. This could easily be facilitated by allowing farmers to buy additional shares on a tax free basis.

“It makes total sense for the co-ops to have direct access to all the capital they require to grow their businesses in the most efficient way possible.

“This measure simply requires a suitable inclusion in the Finance Bill agreed at the next Budget.”