ICOS seeks rationalisation of co-ops

THE Irish Co-operative Organisation Society (ICOS) has pledged to be the catalyst this year to encourage co-ops to rationalise.

Delegates at its 114th annual general meeting of the co-op umbrella body in Portlaoise, Co Laois, yesterday were told the aim was to create a stronger dairy, livestock and agri-service sector. Pat McLoughlin, president, said this entrepreneurial approach will be competitive and provide value and opportunity to its members.ICOS noted in its annual report that 2008 was a very challenging year for co-ops and their members.

Agricultural product prices began high, but steadily fell throughout the year. The final quarter saw the global financial crisis begin to impact dramatically.

This affected co-operatives and members because the demand for dairy and other products fell in European and world markets.

In addition, the economic downturn meant finance and liquidity became an issue where co-ops had to be more aware of the credit worthiness of customers.

Currency fluctuations resulted in major competitiveness changes for exporters.

Mr McLoughlin said the challenges are expected to continue this year. “It is expected we will experience much greater volatility of agricultural commodity prices than in the past.”

Keld Winther Rasmussen, Danish dairy consultant, addressed the meeting on realities facing the milk sector while Mark Voorbergen of Rabobank, spoke on consolidation and positioning strategies adopted by the worldwide dairy industry.

Mr McLoughlin urged co-ops to work together to create a dairy industry structure that can be the envy of farmers throughout Europe.

“There is no simple solution to the current market difficulties and 2009 will be a very difficult year for producers and processors.

“However, the markets will lift eventually, and prices will rise. There is a responsibility on us, as industry leaders to ensure that we have a structure in place that can take advantage of the upturn,” he said.