Ireland most exposed to changes in EU butter policy
Glanbia group managing director John Moloney told the Irish Co-operative Organisation Society’s (ICOS) 30th national conference in Dublin that Ireland is the key producer of surplus butterfat in Europe and consequently is most exposed to this policy change.
He said the key change driver for the Irish dairy industry is the fact that supports to traditional commodity products are now being significantly reduced under the CAP mid-term review.
This will be relatively quickly followed by further trade liberalisation under a new World Trade Organisation deal, which will happen despite the setbacks in Cancun, Mexico.
Between 2004 and 2008, the intervention price for butter will be reduced by 25%, while skim milk powder (SMP) support will reduce by 15%. Butter intervention will be significantly reduced to 30,000 tonnes per annum by 2009.
In total, the intervention milk price cut will be about 6.24 cents per litre, with farmers receiving only 57% compensation for the likely price fall.
“Without the safety net that intervention and other support programmes have provided over the past 20 years, inefficient operators will be quickly exposed and not all processors will be able to make the transition.”
ICOS director general John Tyrrell said it is not in the interest of the EU or Irish dairy sector to increase the level of dependence on intervention as an outlet.
He said ICOS is intensifying its lobbying of the European Commission to utilise export refunds and other market supports so that the EU can competitively export milk products.
Mr Tyrrell said ICOS will encourage co-ops to take the steps to position themselves for new challenges.
