The Dairy Forum is letting farmers down and it has produced no proposal to increase milk prices, according to ICMSA President John Comer.
Comer was speaking following the latest meeting of the forum and said that it is failing dairy farmers.
Describing the Irish policy as one of waiting to see if something turns up and hoping for the best, he observed that it was simply not acceptable.
According to Comer, the processors seem to be focused on achieving their volume targets and if that meant low milk prices for farmers, then so be it.
He accused certain parties of ‘speaking out of both sides of their mouths’ on the need to support farmers but at the same time refusing to support measures to boost milk prices.
“The fact is that the Irish policy for the next Farm Council meeting will not even add 0.1c/L to the price of milk for Irish farmers and I would challenge anybody to state otherwise.”
Irish dairy farmers have now gone a full year receiving a milk price below the cost of production with thousands currently receiving a base milk price up to nine cents per litre below the cost of production.
“The collapse in milk price had taken well over €1 billion out of the Irish economy since 2014 and the only rational response was to address the reality of milk over-supply in a structured way that does not damage Ireland’s plans for expansion.
“In 2009 when milk prices collapsed, it took farmers three years to pay their bills and recover. We haven’t learnt from 2009 and we surely need to look at new ways to address low milk prices.”Also Read: Minister launches booklet at Dairy Forum to help farmers plan cashflow better
Comer then repeated his call for an EU-wide Voluntary Supply Reduction Programme that would pay farmers a set amount per litre of milk reduced on 2016 production compared to their 2015 figures.
Furtermore, the ICMSA President cautioned Minister Creed against getting the interests of ‘the dairy sector’ mixed up with those of ‘dairy farmers’.
He pointed out that links further up the supply chain are doing very well out of the current price crisis while the farmers – on whom the whole industry ultimately rested – have now gone a full year earning no income whatsoever from their herds.
It was not tenable, he said, for anyone to expect the situation to carry on for much longer in this state of dysfunction and manifest unfairness.
The Minister needs to step up and bring forward concrete proposals to increase milk price immediately, Comer concluded.
Minister must deliver actual, state aid backed cash flow finance
Also speaking following yesterday’s first Dairy Forum was IFA National Dairy Committee Chairman Sean O’Leary who said that crucial that the Minister would deliver actual low- cost cash flow funding using the recent EU state aid concession, as proposed by IFA.
“Many of us dairy farmers aged over 45 have not had the benefits of financial management education, and in this respect, equipping farmers with better financial planning skills is undoubtedly very important,” O’Leary said.
However, the Dairy Chairman also said that this must go hand-in-hand with providing farmers with access to low-cost, flexible cash flow finance that they can secure reasonably readily and, most of all, very promptly.
IFA has made very specific proposals in this respect, as EU agreed concessions on state aid have opened the door for the Minister to provide such a cash flow funding scheme, with up to €15,000 of financial cost per farmer being permissible without need for EU vetting.
“We know that such a loan scheme could be used by farmers to back up their current accumulated cash flow debts, whether due to superlevy, merchant credit or other outstanding bills.
“We have proposed that low-cost funding could be obtained by the state by securing farmers’ repayments on their peak month milk cheques from 2017/18, when producer margins will have recovered sufficiently,” he said.
While markets have hopefully started a real recovery, O’Leary said that there is a way to go before milk prices come back up enough to even just cover costs.
“I know the Minister is positively disposed to our proposal, and now we need strong and urgent action to secure this vital cash flow funding,” he said.