CAP review ‘a threat to profitability’
Donal Cashman, president, identified these threats at the Irish Co-operative Organisation Society (ICOS) 30th national conference in Dublin yesterday.
He said co-op boards will have to make decisions on how they will manage their businesses, considering the new support regime and changed market conditions.
Regarding the mid-term review of dairy compensation, he said the consensus is to allocate the national envelope to active producers. This will give part of the EU compensation to producers who expand in the future.
“For milk quota restructuring in the future, the quota transfer price should be reduced to reflect the change in milk supports,” he said.
Mr Cashman also said there is a need to correct some of the anomalies which arise in the new EU regulations concerning farmers who leased land in the base reference years.
Irish Dairy Board managing director Dr Noel Cawley told the two-day conference the future challenges and market opportunities for the dairy manufacturing sector will require a re-evaluation of Ireland’s current product mix.
But he said having looked at the pros and cons of product options, the IDB believes there is a need for a flexible and balanced approach to any change, bearing in mind existing market outlets for seasonal milk.
The essential need is to sustain viable and profitable dairy farms in addition to retaining sufficient finance to develop processing technology and hardware.
A radical change in product mix will take time and investment and obviously would require reduced seasonality of milk production, with increased costs at farm level, Dr Cawley said.
Whilst a broader range of products would undoubtedly provide greater market security, it may not result in higher returns to farmers, particularly over the next five to seven years.
It is desirable to maximise the scale-efficient production of traditional type products, with emphasis on specialisation within that range, and to devote greater resources to R and D, focusing on the strengths and uniqueness of Irish milk and milk products.
Dr Cawley said opportunities exist for increasing sales of added-value products, particularly under the Kerrygold brand at retail level, but also in the food service and food ingredient markets.
The IDB intends to continue to expand business through its subsidiary companies in the EU and the USA, both by organic growth and through further acquisitions, to provide maximum returns to its Irish owners, he said.
