Dairy sector seeks market support from European Commission head

MARKET support for the crisis hit dairy sector was sought yesterday as the head of the dairy section in the European Commission, Thorkild Rasmussen, began two days of meetings in Ireland.

Mr Rasmussen, who is here at the invitation of the Irish Co-operative Organisation Society, heard milk processors and producers explain how the sharp fall in dairy market prices and weak demand is hitting the industry.

ICOS director general John Tyrrell called on the commission to use the measures available to support the market.

“Market prices have fallen below the intervention support level and producers are receiving prices, which are well below the cost of production,” he said.

Richard Kennedy, IFA dairy committee chairman, said the dairy sector will play a crucial part in helping turn around the ailing economy. But it can only do so if it receives the exceptional supports it requires this year.

He said Agriculture Minister Brendan Smith and his officials must deliver what is needed to stabilise markets in 2009.

“This is an exceptional crisis for one of Ireland’s most valuable native economic sectors, worth e2.5 billion of exports, employing 20,000 dairy farmers, with up to another 30,000 jobs depending directly or indirectly on it,” he said.

Mr Kennedy said Mr Smith must canvass his fellow ministers in advance of the EU Agriculture Council on March 23 to deliver stronger EU dairy market supports to help stabilise dairy markets.

Meanwhile, demand for milk quota nationally continues to outstrip supply, but there has been a sharp reduction compared to previous trade exchanges. Mr Smith said this has been reflected in the lower volumes traded in the latest results from the trading scheme.

Mr Smith was announcing the aggregate results of the sixth milk quota trading scheme, the second of two in respect of the 2009/2010 quota year.

A total of just over 44 million litres of milk quota was offered for sale, with 21.4 million litres successfully traded.

Of this total, 11 million litres was sold on the exchange at prices ranging from 10 to 25 cent per litre, with 10 million litres of this amount traded at less than 20c per litre.

The remaining 10.4 million litres was sold through the priority pool at the maximum price of 10c per litre.