Opinion: Voluntary milk reduction has tremendous future potential
It strikes me that the European Commission has handed European dairy farmers a very effective means of countering future volatility within their industry: it’s called a Voluntary Milk Reduction Scheme.
And if evidence is required to gauge the resonance that such a measure has struck with farmers, it’s simply a case of reflecting on the uptake for the ongoing scheme here in Ireland.
In theory, voluntary milk reduction is the last thing milk producers in this country should ever want to sign up for.
As a country we are committed to the growth targets enshrined within Harvest 2020 and with cow numbers having increased so significantly over recent years one would have thought the physical scope to reduce milk output over the next few months is minimal.
Yet, approximately one in four dairy farmers in Ireland have said ‘Yes’ to voluntary milk reduction in 2016.
This is, truly, a staggering fact: one which should send a clear and direct message to milk processors in this country.
In the first instance, farmers are telling the co-ops, in a very meaningful way, that they are not happy with the prices available at the present time.
So clearly producers are saying: if you want more milk then you must pay a realistic price for it.
Moreover, the scheme also sets a benchmark in terms of what producers will accept if the principle of using milk reduction as a market supply tool was to be used in the future.
During his visit to this year’s National Ploughing Championships in Tullamore, the Minister for Agriculture Michael Creed declared that the reduction scheme is a one-off measure and should not be regarded as the introduction of milk quotas by the back door.
But, in truth, it can never be this as the scheme is totally voluntary in nature. Above else, voluntary reduction gives dairy farmers a degree of choice in the way they run their businesses.
This point has been made very eloquently on a number of occasions by ICMSA President John Comer.
Is there a future for the voluntary milk reduction scheme?
Of course there is. The problem moving forward is coming up with the money to make it all work. Recent murmurings from Brussels would indicate that the EU Commission will never again fund direct support measures for agriculture from public funds. So why not share the funding burden?
Surely it’s not beyond the realms of imagination for European Union supermarkets, milk processors, the European Commission and farmers to pay into a milk reduction fund on an ongoing basis.
This would then create a pool of finance to be drawn down from, once farm-gate prices drop below an agreed level.