Moves to re-introduce milk quotas by the back door would be the worst of all worlds for the Irish dairy industry, according to IFA Deputy President Tim O’Leary.
Commenting recent proposals that Europe should introduce some form of milk production constraint policy as a means of counteracting the impact of volatility, O’Leary made it quite clear that such an approach will not have the desired effect.
“Volatility is nothing new within the dairy sector. Back in the spring and summer months of 2009 world dairy markets crashed. And, let’s not forget that the milk quota regime was fully in place at that time, as was the availability of intervention, export refunds and aids to private storage.
“Milk quotas have blighted Irish dairy farming for the past number of years and I find it strange that anyone should be calling for the introduction of a mechanism that could constrain Irish dairy output in the future, given that the current milk quota regime is still oprational. For too long, Irish dairy farmers have had to constrain the output of their freshly calved cows, simply to keep within their quota allocations. This is inherently unfair and the sooner these restrictions are fully removed the better,” he said.
The IFA Deputy President fully acknowledges that farmgate milk prices will come under pressure during the first six months of 2015.
“The first point to be made is that most of the milk produced in Ireland during 2014 secured a good price. Normally, crises in world markets hit at a time of peak output in this country.
“In essence we have two months to plan for what’s coming down the track in 2015. The first step that must be taken is for EU Heads of Government to ensure that the dairy industry is not the fall guy in the context of the ongoing dispute with Russia. Milk producers did not create the circumstances leading to the introduction of the EU food import ban by President Putin: nor should they be the only group having to pay for it.
“In the short term the EU Commission must act to ensure that intervention, aids to private storage and export refunds are ramped up to ensure that they provide adequate support for milk producers over the coming monts.
“There is also an onus on Irish co-ops to ensure that their expanded dairy processing capacity, coming on line in 2015, is operating at full efficiency from day one,” he said.