Co-op model way forward for dairy industry

By Ray Ryan

THE best way to restructure the dairy industry is through the co-op model, Lakelands Dairies chief executive Ed Prendergast has said.

Broadly welcoming the Strategic Development Plan for the industry, he said the co-op model retains ownership in the hands of primary producers, and ensures that the benefits of rationalisation and efficiencies are passed back to those producers, maximising the economic benefits of the industry.

He said it also gives farmers ownership of the value created in the industry, and retains the revenues generated within rural Ireland. The most suitable way to achieve efficiencies is through routes that are easier, simpler and more palatable to the industry than the highly-ambitious level of merger and acquisition activity that the report envisages, he said.

A balanced mix of mergers, joint ventures, partnerships and strategic alliances between the existing players could achieve the desired level of industry efficiency.

He added that there is a need to protect and safeguard the future viability of dairy farming in the BMW region, which has a 260 million gallon milk pool, and called on the Government to support farmers in that region through by giving them an enhanced payment from a new producer compensation scheme.

This would play a vital role in sustaining farm enterprises and maintaining rural communities during the difficult times which lie ahead, he said.