Stephen Cadogan: Ornua first to the rescue as crisis deepens on dairy farms

Ornua brought badly needed respite for dairy farmers this week, with their suspension of a milk levy from May 1 adding nearly €6 million to dairy farm incomes in 2016, helping farmers get through the unprecedented global milk price slump.

Foregoing this money which it uses to promote its Kerrygold brand in over 110 countries, the former Irish Dairy Board has shown the way forward for the government and industry to help everyone through the slump.

A combined effort is now urgent, with EU Agriculture Commissioner Phil Hogan saying the Commission has deployed all of the instruments available to it to help the EU’s struggling dairy and pig farmers.

The Ornua initiative follows months of milk price subsidisation well above market levels by its co-op members. 

Co-ops have pledged to continue that support for their farmer members as long as possible.

Now the baton has been passed into the hands of national governments - and in Ireland’s case, to the caretaker Government and Taoiseach.

The first duty of national governments is to approve the Commission’s doubling of intervention ceilings for skimmed milk powder and butter.

Intervention for skimmed milk powder is already on hold, and subject to a tendering system which adds to dairy price uncertainty.

National governments and the European Parliament also have to get behind the new EU regulation allowing dairy groups to plan milk production for up to six months, which has been adopted by the EU Commission.

Unfortunately, many governments haven’t put their shoulder to the wheel. 

At the end of February, only €162m of the €420m of last September’s EU crisis aid to member states had been spent. None had been spent yet in 14 Member States.

In Ireland’s case, many young dairy farmers are still waiting for a direct payment top-up of €800.

Such delays deepen the crisis for farmers, on top of the bad weather, late spring, and extra bills which are adding to the misery of low milk prices for Irish dairy farmers.

At this week’s meeting of the Dairy Forum Sub Group, all stakeholders, including Department of Agriculture officials, gave a clear commitment to deliver practical financial planning advice and support to farmers in greatest need. 

But those are empty words as long as some young dairy farmers are still waiting for payments 50% financed by the EU. 

Meanwhile, acting Agriculture Minister Simon Coveney should explore how to utilise the EU’s new temporary State Aid allowances of up to €15,000 per farmer.

IFA has suggested this could be used to provide interest free or cheaper short term finance, a one-year moratorium on superlevy repayments, or tax measures to help farmers better manage their highly volatile incomes.

An early announcement from the Government on how it might utilise the new State Aid allowances would be encouraging for farmers.

IFA praised the Farm Financially Fit initiative being developed by Teagasc to offer farmers at workshops and farm walks help with cash flow budgeting, and cost cutting without damaging their long term sustainability.

Workshops and farm walks involve farmers helping each other, easing the overall burden, which they already doing through their co-ops.

They can take heart from their colleagues on the other side of the world, where hundreds of dairy farmers in New Zealand have volunteered to act as short-term mentors, providing support and advice on animal management, staff, pasture, feed, and personal well-being for colleagues.

A record number of farmers in New Zealand are using these services for advice or assurance, even if it is only phone calls for advice from more experienced farmers.

One farmer said, “In tougher times, it is really comforting to share ideas around how to make the most of what little money you have.” 

In New Zealand, debts of up to €6m per farm, combined in some cases with high farm costs, and one of the longest ever periods of low milk price, are expected to take a toll on the dairy industry.

The crisis is not so deep in Ireland, and Ornua and the other co-ops are now leading the way forward.


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