MEP warns farmers to remember costs and fines in expansion plans

DAIRY farmers need to take building costs and the risk of incurring super levy fines into account before racing ahead with expansion plans, cautions MEP Mairead McGuinness.

There is plenty of time to expand between now and the end of the milk quota in 2015, the Ireland East Fine Gael MEP said in Conahy GAA Club, Kilkenny. While welcoming the planned increase of 50% in milk production in Food Harvest 2020, she urged farmers to focus on market opportunities for dairy produce — not just on on-farm potential for expansion.

“Farmers need to focus on profitable expansion, not just expansion,” said McGuinness. “The future looks bright for food production as the global concern about food security intensifies. Agriculture is key to the economic recovery of Ireland. But farmers know that while commodity prices are rising, so too are farm input costs, which will erode the much needed income improvement on farms to sustain expansion.”

McGuinness warned of the risks to farmers in expanding without sufficient milk quota prior to their abolition in 2015.

“Already farmers have been warned about the possibility of a milk super-levy in the current year,” she said.

“Estimates show that there will be 34,000 extra cows in 2011 and a further 70,000 extra cows in 2012. Expansion is costly and high risk in the run up to 2015, unless all factors are taken into account, including super-levy risk.”

McGuinness said there is little appetite in the EU to suspend the super-levy regime in the run-up to milk quota abolition.

In a future beyond milk quotas, McGuinness said there is support for a Commission proposal on “contractual relations in the milk sector”, which aims to boost the position of the dairy producer in the dairy supply chain.