Co-ops begin talks on quota scheme
It has already discussed the proposals at board and dairy committee levels and will have further consultations with co-op technical staff and contact with individual co-ops.
ICOS president Padraig Gibbons said yesterday the minister’s announcement last month took most people by surprise.
“This was because in starting the debate on what way restructuring would apply in Ireland, she made clear her intention for the department to have a more ‘hands off’ approach than in the past and that she intended to introduce a more ‘open market’ system for quota transfer,” he said.
Mr Gibbons told the ICOS dairy conference in Emo, Co Laois, that the consequences of the minister’s announcement will be different from one co-op area to another.
“Some co-ops favour the minister’s approach because they believe that it will allow producers to offer prices for quota, which will attract more producers to sell their quotas.
“Others do not believe that it will bring faster restructuring, but that the effect will be to drive up the price of quota,” he said.
Mr Gibbons said some areas, such as those in the co-ops in the northern and western part of the country, already have a high rate of restructuring and they believe that farmers in some have already made significant investment in quotas.
“These farmers may not be in a position to offer higher prices for quota under a new system, thereby resulting in quota price differentials between co-operatives.
“Many issues have to be taken into account in the debate. The key question will focus on what are the appropriate measures to position the Irish dairy sector at farm and processing level to be competitive in the EU for the future,” he said.
Mr Gibbons said he is encouraged by the number of dairy co-ops which are working together to improve processing efficiency by contract manufacture and other such mechanisms.
There are also many examples of milk being sold to other processors in order to improve the utilisation of processing capacity.
