High costs, low income sector needs attention
He said profits in dairy processing and farming are under severe pressure, and the pay deals in any future national programme would have to take account of this difficulty.
He warned that the agri-food sector in general has faced increases in energy costs of up to 70% since 2000, and labour costs have gone up by more than 31% in the same period.
Pension costs, waste and environmental cost had also increased enormously.
“In addition to this cost burden, revenues for the dairy sector, under the Luxembourg Agreement, are expected to fall by over 20% from 2004 to 2007,” he said.
Mr Gibbons has also warned it is essential that Agriculture and Food Minister Mary Coughlan raises concerns with Commissioner Fischer Boel to ensure that milk market support stability is assured.
He said that the European Commission’s decision to cut butter and Skim Milk Powder export refunds on July 14 (by 5.2% and 20%, respectively) was excessive, as it severely reduced EU export competitiveness. More cuts in dairy support are feared at this week’s EU Milk Management meeting in Brussels.
Dairy industry difficulties have been reflected by Dairygold co-op cutting their price for July milk by €0.44c/l (2c/gal).
IFA National Dairy Committee Chairman Michael Murphy said it most unusual for Dairygold to anticipate milk price decisions.
“This kind of approach must not become the norm in co-ops, because it prejudges markets and could potentially deny farmers the benefit of positive market developments.”
