Minister Michael Creed needs to get to grips with collapsed milk price

Together with some of my colleagues I was happy to accept an invitation from our new Minister for Agriculture, Food & the Marine, Michael Creed TD, to meet him in the department last Thursday.

It would be a considerable understatement to say that we had matters to discuss.

Mr Creed takes up his office when our family dairy farm system — which ICMSA regards as the jewel in our agri-crown — has been decimated by a collapse in milk price that has seen a near 50% fall over the two years from 2014.

We are now fast approaching the first anniversary of the point when the price being paid to farmers for their milk first went below the cost of production.

I leave it to your imagination to estimate the kind of media meltdown we would be witnessing if any other section of our society was asked to work on the scale and with the intensity that dairy farmers have to for a full year for no income from that work.

However, that is the reality and it is a reality we’re all going to have to work at changing as soon as possible.

There are two aspects to the problem, firstly, we have the quite shameful unwillingness by the Commission and individual member states to confront the margin-pillaging indulged in by the retail corporations.

Supply chain fairness

Agriculture Commissioner Phil Hogan is just the latest to talk tough about ensuring fairness in the supply-chain only to then undergo a complete change-of-heart on the question of coercing the corporations into acting fairly.

ICMSA’s annual general meeting last November was addressed by the commissioner who gave the definite impression that he was going to impose fairness on the chain.

Alas, that has now been diluted down to the usual guff about ‘voluntary codes of conduct’ and the like.

Someday someone within the Commission is going to confront the retail corporations about their systematic abuse of Europe’s farmers and primary producers — but until then we must focus on those tools which are within our immediate grasp and deploy them to try and restore milk price to some level of viability.

That is why we recently proposed an EU-funded and completely voluntary Milk Reduction Programme that would pay farmers approximately 10c per litre of reduction on a 2015 production to 2016 production basis. The scheme would be voluntary and emphatically would not obstruct farmers who wish to expand to any level.

Insufficient response

However, the present reality of over-supply has to be recognised and dealt with and it is patently no longer sufficient to just tell farmers to ‘sit tight’ and wait for markets to recover almost a year after their price fell below the cost of producing the milk.

If the reality of the haemorrhage of money out of our farming and wider rural economies is still not concentrating minds, then I would quote only one figure.

Our dairy farmer milk suppliers have just received their co-op statement for milk supplied in April. ICMSA calculates the value of those payments is €100m lower than the corresponding figure in April 2014.

Remember, that’s just one month. In the face of this scale of loss and the pressure consequently being felt in Ireland and right across the EU’s dairy farm sector, the present Commission and Council of Ministers’ response of adjusting or ‘tweaking’ storage volumes to try and support prices is demonstrably inadequate.

Direct response needed

We need a a much more direct and immediate response and in ICMSA’s opinion that must mean a voluntary milk-reduction scheme that could reduce overall EU supply but still leave us poised to ramp-up production easily and smoothly when markets and prices recover.

Not a single farmer will be compelled to alter his or her production on this model; it is entirely a matter for the individual producer.

ICMSA had also raised other issues with Mr Creed including the necessity of a vibrant live export market and the ongoing problems with TAMS approvals and payments. Milk price is, has been, and always will be our focus. And we urge Mr Creed to make it his also.

It must be Item No 1 on his agenda as he settles into his office with all our earnest good wishes.


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