Move to cut casein aid under fire

ICOS, the co-ops’ national umbrella body, strongly criticised a decision by the European Commission to cut casein aid by 42% at yesterday’s milk management meeting in Brussels.

Donal Cashman, president, said it is essential that Agriculture and Food Minister Mary Coughlan urgently raises the concerns of the Irish dairy sector with Commissioner Mariann Fischer Boel.

He said ICOS had written to the minister and the Commission officials in the past three weeks outlining the reasons why EU export competitiveness needed to be strengthened and casein aid should not be reduced.

Mr Cashman said this view is shared by the European farmer and co-operative organisations (COPA/COGECA) in Brussels, which have also written to Commissioner Fischer Boel.

EU butter and skim milk powder (SMP) prices have fallen by the full intervention price cut of July 2004 (€200/t butter and €100/t for SMP) and returns for other products have been adversely affected by support cuts.

Improvements in the world market (which only accounts for 6% of world milk production) have not benefited EU producers because of successive cuts in EU export refunds, aid levels and a weaker dollar. These developments are giving rise to significantly reduced returns to co-ops.

Mr Cashman also said the direct payment supports provide around 55% compensation for the CAP Reform milk intervention price cuts.