Glanbia told seasonality scheme punishment does not fit crime

FARM groups have told Glanbia that the punishment does not fit the crime for suppliers who fail to comply with limits set under its new seasonality scheme.

The Irish Creamery and Milk Suppliers Association (ICMSA) said that imposing a 20% fine for even a 1% oversupply past the “tolerated” 16% limit is too harsh. The dairy group accepts the need to spread milk production out of peak production months, but disagrees with the way this goal would be managed under Glanbia’s proposed scheme.

The ICMSA has met Glanbia senior managers and requested that plans for post-quota processing plans be factored into the proposed scheme.

ICMSA dairy committee chairman Pat McCormack said: “Given that the milk quota regime is in place until 2015, it is obvious that the management of the seasonality scheme — which will operate alongside the super levy — is going to pose serious challenges for farmers, many of which will involve the climatic variations in Ireland.

“The penalties seem very severe indeed. For instance, a 1% increase in milk supply in June past the 16% ‘tolerated’ would mean a fine of 20% on the total value of May/June milk. That’s a huge and crushing penalty that seems grossly excessive set against the size of the infringement and the technical difficulties of operating the system.”

The dairy farmer group also told Glanbia that its seasonality scheme will need to take account of weather conditions and super levy issues. The ICMSA has outlined a number of essential changes to address the genuine concerns of farmer-suppliers.

The ICMSA has also called upon Glanbia to clearly state its position regarding additional processing capacity post-2015, noting that suppliers need clarity on long-term post-quota plans to properly assess the proposed seasonality scheme.

Mr McCormack said: “It is the clear view of ICMSA members that the scheme needs to be reviewed and, in particular, the level of penalty needs to be reduced or, alternatively, the quantity of milk that the penalty is applied to is reduced substantially.

“The post-2015 scenario is going to pose challenges for the industry, both farmers and processors and it is essential that we work in co-operation. If this is the objective — and ICMSA thinks it most definitely should be — then the seasonality schemes needs to be adjusted to take account of the practical realities of farming and that must start with a significant reduction in the level of penalty being imposed.”

Meanwhile, the Irish Farmers Association has also approached the Glanbia management to request alterations to the proposed seasonality scheme.

IFA dairy chairman Kevin Kiersey has told Glanbia that its scheme compares poorly with the scheme being put forward by Dairygold, which offers a greater lead-in period to manage seasonality issues.

Mr Kiersey said that suppliers still run a high risk of exposure to super-levy fines if they attempt to stay within the June production framework being proposed by Glanbia.