‘Imbalance between dairy producer and seller must be resolved’

THE biggest challenge for the dairy sector is the increasing imbalance of power between those who produce milk and those who sell it to the final consumer, according to Ireland East MEP Mairead McGuinness.

Addressing the ICMSA annual meeting in Limerick, she said that all around the globe farmers face the same challenge, yet the issue has not been tackled effectively because of an unwillingness to address competition law and how it interacts with primary producers.

Ms McGuinness said: “The EU’s CAP reform proposals acknowledge that there is a problem in the food supply chain and that over time farmers receive an ever-decreasing share of the final retail price paid for food.

“Unless this is addressed returns to farmers will decrease over time, while profits elsewhere in the chain increase.

“Proposals to strengthen producer and inter-branch organisations as outlined in the milk package, likely to be voted on in the European Parliament early next year, mark a step towards dealing with the problem but do not go far enough.”

She said the EU continues to focus on how to strengthen producers negotiating ability “but fails to tackle the elephant in the room — how to decrease the power of the few in the retail sector who control what we eat, what we pay and ultimately how much farmers make.”

She said she has met farmer representatives from across the EU, from Norway and from New Zealand and the issue of retail buying power is top of their agenda.

McGuinness said that Ireland can and will expand milk output in a quota free era post-2015.

“It is the beginning of a new era for farmers, with many young farmers excited by the prospects of producing more milk without restriction, but it is a duty of the policy makers to ensure that the system they are supplying into is fair and open,” she said.