Luxembourg agreement disappoints milk sector
On the livestock side, the Irish Meat Association said Minister Walsh and his officials made progress in diluting the impact of the original proposals, particularly in regard to full decoupling and degressivity.
Donal Cashman, president of the Irish Co-operative Organisation Society (ICOS), the umbrella body for the country's co-ops, described the outcome in Luxembourg as severely disappointing for the dairy sector. He said it will result in a 19% price cut, 4% higher than the 15% agreed in 1999.
ICOS and co-op analysis confirmed that the value of the Irish dairy sector could be reduced by €327m by 2007.
This would cost dairy farms a net income reduction of €141m annually, after allowing for compensation of €186m. This is an income cut of €15m more than Agenda 2000.
Mr Cashman said that despite some improvement in the butter intervention tonnage limits, there is still a major threat of butter tendering being introduced, which could exacerbate the value and net income cuts.
He said it would be critically important that the commission manages the export competitiveness of EU products to reduce the need for intervention from now on.
Mr Cashman noted that the negotiations had achieved about 81% compensation for the additional 4% price cut.
However, he said it was important to clarify that, overall, the compensation for the 19% price cut is equal to about 58%, not 81%.
Mr Cashman said the agreement, compared with the current milk sector supports, would reduce farm-gate milk prices by 6.25 cent per litre (22.35 pence per gallon).
