Agriculture Minister Simon Coveney has pushed his EU colleagues for changes in butter fat levels to avoid the superlevy the country’s farmers expect to face later this year but says we are quickly facing new challenges from other EU states.
While Mr Coveney said he had the support of a number of countries, including Britain, Germany, Luxembourg and Denmark, other countries had different concerns, making for a difficult debate.
Farmers have 14 months to go until the quota system for dairy products is abolished and the aim is to increase Irish milk production by 50% over the next five years, answering a huge demand globally.
But with the latest figures showing milk production overshooting the current quota farmers are facing a massive fine, according to Pat McCormack of the ICMSA. Farmers who could benefit under flexi-milk previously will find that it has been considerably reduced this year.
Ireland is around 1.63% over quota under the current butterfat adjustment and Mr Coveney was hoping to have this increased to around 1.5%. “Nothing dramatic but would allow us to stay within quota,” he said, adding that farmers should plan on staying within quota.
But the European Commission is reluctant to make any changes in case the hard-fought package to abolish the quota system was reopened.
Mr Coveney described the debate as “difficult”, adding that he thinks there may be political concessions to ease the last 14 months to allow more production. But the Commission must not allow supply control measures to be introduced then.
“If prices fall post-quota some want that the countries producing most would be asked to shoulder some of that burden, but for us that is out of the question. We will deliver on dairy growth and there should be no restriction on that,” he said.
He agreed that the price of milk would not necessarily be reduced with increased production — it did not in the case of New Zealand in the 1980s — and he believed what with huge markets such as China forecasting a 40% increase in consumption it would be more than enough to absorb increased production.
There would be price volatility and structures needed to be put in place to minimise exposure for Irish farmers and the dairy industry, such as long-term pricing contracts and at EU level a futures market for dairy produce, he said.
Other stability supports such as rural development funds were among the many tools available to provide income stability for farmers, even before intervention storage.
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