1,200 of Dairygold’s farmers refuse to sign new milk supply contract
The Concerned Dairygold Action Group’s figures are supported by the North and East Cork ICMSA, who say 12 Dairygold suppliers are moving to Boherbue Co-op, while 50 more want to move to North Cork Co-op.
“This is the thorniest issue I have ever dealt with,” said North & East Cork ICMSA chairman Julian O’Keeffe. “People are looking to leave in large numbers. I would like to see a solution, but I really can’t see it.
“Dissent with the contract has been in the over- whelming majority at any meeting we’ve held or attended. Having to increase their shareholding is a major issue for a lot of guys, and it will take more than the gesture of reversing the 2cpl penalty threat to get them to sign.
“Our members are adamant that they won’t sign, and Dairygold are adamant that they’re driving on with this. This will be a very difficult one to solve. A lot of groups have taken legal advice, and the advice is very similar. I think next Wednesday night will be a defining moment.”
The action group is hosting a public meeting in the GAA Convention Centre in Mallow next Wednesday night. It will be addressed by solicitor Oliver Ryan-Purcell and by agricultural consultant Richard Rea.
The group’s key protest points relate to its reading of the Milk Supply Agreement as giving the Co-op the discretion to revisit the terms and conditions at its sole discretion, informing suppliers of any amend- ments “from time to time”.
The group says the agreement forces them to surrender production rights in advance of the abolition of EU milk quotas. The group raises several questions in relation to the assignability of the contract in the case of its transfer; for example, in the case of farm ownership succession.
The group wants a commitment on milk price, and the separation of the “revolving fund” contributions (i.e. supplier contributions to fund extra processing capacity post-expansion) from the farmers’ milk cheques. They are also seeking guarantees on minimum and maximum contributions to this fund, and a review of the milk output forecasting model.
Dairygold says it has established procedures for its members and suppliers to debate policy and does not comment on statements outside of those procedures.
Our understanding is that the co-op sees milk expansion as requiring a two-way commitment. It wants members to sign up to the agreement and to forecasting, to give it a two-year line of sight to its expansion milk supply.
The co-op says there has been clear evidence of farmer intent to expand milk production on farms, with surveys predicting a 63.5% output increase from 2015 to 2020. The co-op says it needs to expand its processing capacity, but says it is not in the business of gambling and wants to have capacity exactly to match milk supply on time.
Meanwhile, the IFA is urging Dairygold suppliers to engage actively between now and the end of March with the one-to-one sessions aimed at helping farmers with the production forecasting process.
IFA dairy chairman Kevin Kiersey said: “The Dairygold board, under co-op rules, has extensive rights, among other things in relation to the setting of the milk price, to decide on milk supply conditions. Many of the provisions in the MSA are already in the co-op rules, and are important to the investment to cater for milk production expansion.
“However, the legalistic nature of the wording of the agreement has raised hackles among farmers, and it is vital that Dairygold would show their willingness to deal with farmers with a reasonable level of flexibility.”
