Survey “a service” to dairy industry
It was a timely exercise as the industry prepares for great changes next January when aid will be historically based and not tied to actual on-farm production.
The new European Union policy has led to great uncertainty among all Irish farmers who have been examining their own individual situations and trying to make huge decisions. Some of the questions they have been grappling with concern basic issues as to whether they will continue farming, will they take their decoupled entitlements and reduce production, or will they continue to expand their production base? These were some of the questions that led Glanbia, the country’s largest milk processor, to embark on a survey of its 5,181 suppliers.
The findings show that a majority of those who responded wish to remain in milk production but quota availability and cost are key threats. Over 51% or 2,650 of all Glanbia milk suppliers responded to the substantive survey carried out in order to gauge dairy farmers’ responses to the mid term review of the EU Common Agricultural Policy (CAP), particularly the move to the single farm payment.
As Glanbia chairman Tom Corcoran pointed out effective decisions must be based on the best information, and that must include the voices of the people at the heart of the industry. Those who filled in the survey forms, which contained a total of 45 questions, clearly took time and care in making their views known.
And for that the industry as a whole must be grateful as it plans for a challenging future. Group managing director John Moloney said Glanbia was encouraged by the high response rate and that so many committed, commercial dairy farmers see a future in farming. The survey was directed by John Fitzgerald, Glanbia Farm Development Manager, who said that in making any recommendation it is important to highlight the fact that the respondents have on average milk quotas 23% higher that those suppliers who failed to respond.
As such, it is reasonable to assume that, in the main, the respondents represent a proportionately higher number of committed, commercial dairy farmers. It is also clear from the results that these suppliers have made the necessary on-farm investments to cater for significant expansion. A majority (73%) of the respondents who represent almost 2,000 of the most commercial dairy farmers in the country, said they wish to remain in milk production long term if they can achieve more quota.
Only 25% of respondents expressed uncertainty about their future. Average milk quota for the respondents is 276,600 litres (60,844 gallons). It is 225,000 litres (49,500 gallons) for those who did not respond.
Those who responded want to increase their milk quotas by 52% in the next three years to an average of 433,500 litres (95,391 gallons). But this is not currently feasible without significant changes to the quota restructuring scheme.
Only 50 respondents (2%) with average quota size of 42,000 gallons signalled their intention to cease milk production. A further 14% are unsure. Other significant facts from the survey show that 23% of Glanbia’s suppliers have no identifiable successor. Almost half do not know whether or not their children will succeed them as farmers. But 43% said they have children who are still too young to declare if they will take over the running of the farm in the future. The need for financial planning at dairy farm level was demonstrated by the fact that more than 1,000 suppliers admitted to not knowing their milk production costs and to needing help in this area.
Glanbia has already met with Agriculture and Food Minister Mary Coughlan, and proposed a quota restructuring system which allows 70% of an exiter’s quota to be sold through a milk quota exchange with the other 30% continuing to be sold through the restructuring scheme at reducing prices over a period of three years (from 0.75c in 2005 to 0.50c in 2006 and 0.25c in 2007). It says it is committed to working with its suppliers to secure a viable and cost efficient supplier base. The survey is one of the management tools it is using to identify clear policy areas that need to be addressed.
The main issue to have emerged from the survey is a concern on the cost and availabilty of milk quota. The nitrates directive as currently proposed was indentified as a serious impediment to farm development. A need to relax the rules governing participation in milk production partnerships was also highlighted. Other issues that emerged include the availability of labour and the need for greater farm planning and budgeting.
The study findings will be closely examined. They provide a wealth of data on the intentions of committed commercial farmers, and already there are indications that the document will not be left to gather dust on the shelves.
Glanbia has, for example, developed a series of proposals to respond to the needs of suppliers as detailed in the report.
“We intend”, said Tom Corcoran, “that this perspective will inform and influence the direction of dairy policy in Ireland for the benefit of the sector as a whole, which is in everybody’s interest.”
