Future is not as bleak as it seems

Plans to axe up to 2,000 jobs at Dairygold Co-op as part of a three-year rationalisation programme may seem drastic, but this does not mean that all of those jobs will be gone.

The transportation aspect of operations will be outsourced, which means that the jobs will still be there, but they will be managed by a specialised transport company, possibly set up by those currently employed by the co-op.

There have been suggestions that Jerry Henchy, the new chief executive of Dairygold, was painting the blackest picture possible in order to shock people into facing reality. That is a tactic adopted at the outset of making radical changes.

It helps to ensure that people do not panic when things appear to go wrong. Those people are then generally relieved if the worst does not occur.

Irish agriculture and food processing is undoubtedly in a state of flux. Last year, Dairygold's profits fell by 80% to just €4.8 million, on turnover of €950m.

In reality the company had a trading loss, because it actually made 6m profit from the sale of its valuable stake in IAWS.

Some insisted that selling off the company's valuables was not a remedy, because actual reform was needed. It was compared to taking aspirin when surgery was required.

This led to a revolt among the farmer-owners of Dairygold, and a motion of no confidence ended with the removal of nine of the ten-member board of the co-op.

In its annual report for 2002, Bord Bia indicated that there was a poor global demand for dairy products and that prices were historically low so those exports dropped by 16%.

But there were record sales in this country's exports of frozen and processed beef to Britain. Even though the volume of overall beef exports declined by 8%, the actual value rose to €1.2bn, up by 31%. Thus the overall picture has some distinctly positive aspects.

Kerry Group has already blazed a trail from a dairy co-op to a food ingredients producer on the international market with a proven track record. As a former senior executive with the successful Kerry company, Jerry Henchy has a vision of where he wants Dairygold to go. "We want to move to milk processing, consumer food, UK division, agri and suburban superstores," he explained. "That's the broad approach."

With the expansion of the European Union, Irish farmers have to recognise that they no longer have the kind of influence which they enjoyed following our accession.

Our economic position may have been strengthened by participating in the euro, but our ability to influence the broad course of developments has been weakened by that participation, as well as by the CAP reviews which brought quotas, premia, and now decoupling and modulation.

Necessary changes are inevitably hardest for those most resistant to change. Nineteenth-century farming and business methods became obsolete during the last century, and just as surely the methods of the last century are going to become obsolete in this century.