Glanbia welcome milk quota move

GLANBIA yesterday welcomed the announcement by Agriculture and Food Minister Mary Coughlan that she intends to introduce a new market-led system of milk quota management.

However, the ICMSA warned that the move would be disastrous and would result in higher costs and fewer dairy farmers, while Macra na Feirme said it was opposed in principle to a more market-driven system for transferring quota.

Ms Coughlan said the new system is needed. It would involve freeing up the movement of milk quota to committed producers and would benefit the cost of production and assembly.

Glanbia deputy group managing director Geoff Meagher recalled that 73% of respondents to a farmer survey conducted by the group in 2004 stated that their future in milk production was dependant on achieving on average 52% more quota.

“Since then we have made a number of submissions to the Department of Agriculture and Food calling for quota restructuring and we are pleased to see the minister respond in such a timely manner,” he said.

Mr Meagher said the challenge will be to implement a scheme attractive enough to encourage maximum farmer participation in the next two years.

This will require the availability of quota for those who wish to expand at a viable market rate. It must also be structured in a way that is meaningful in terms of helping those who wish to exit.

However, the ICMSA president Jackie Cahill claimed Ms Coughlan is proceeding down a road that will place a millstone of €40 million annually around the necks of dairy farmers through paying an increased cost for milk quota at a time when margins in the sector are already slipping.

He said a co-op-based milk quota exchange will not increase the volumes of quota above the levels achieved by the present system unless there is a substantial increase in the price paid.

Mr Cahill said the majority of farmers who wish to expand will simply not be able to afford the higher costs of quota. The only people who will definitely benefit are the quota agencies, or brokers, who will have nice cost-free income off the backs of the ordinary farmers.

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