Anger over profits kept by co-ops

DISTRUST between dairy farmers and their co-ops has widened with the acceptance by IFA leader John Dillon of a report, compiled by three Munster farmers, which indicates that co-ops retained 15p (19c) per gallon from their profits in 2001.

Mr Dillon said the farmers' findings are undisputed by the industry and they explode the myth that co-ops have "carried" milk prices, with support of 5p (6.5c) per gallon. The findings will play a major part in IFA's rejection of the 2p (2.5c) per gallon price cut by the farmer-controlled Dairygold Co-op, which would take 1,500 out of each supplier's pockets, in per year terms, according to IFA. "Dairy farmers cannot cope with increased costs and falling prices," warned Mr Dillon in his rejection of the Dairygold price move.

The farmers who carried out the milk price investigation are Denis Buttimer, Lissarda, Co Cork; John McNamara, Kilmallock, Co Limerick and David Thompson, Cappamore, Co Limerick.

They have welcomed acceptance by the Irish Dairy Board and by IFA of the scrapping of the crude calculations used for many years to calculate processing profits per gallon of milk.

The old calculations were based only on butter and skim milk powder. The new assessment of processing returns, which takes into account at least 28 dairy products, indicates that there was 15p (19c) per gallon more coming back to co-ops than dairy farmers had realised.

In 2001, this would have totalled £165m (209.5m), and Denis Buttimer said he wants to know what became of this surplus retained by co-ops. He said the lack of transparency in the industry must be remedied before farmers have enough trust to participate in any development plans for the dairy industry such as the Prospectus-Promar International study launched last week.

He revealed that he and his two colleagues have spent years poring over Customs and Excise export figures, milk processing technical information and statistics from the Dairy Board, CSO and Department of Agriculture.

John McNamara told a recent meeting of Limerick IFA that there was no suggestion that any money was unaccounted for by anybody or that the market return was not passed back to the processors, but that he and his two colleagues and other farmers were concerned that profits from lucrative "added value" dairy products developed over the past two decades were not showing in their milk prices and they had done a lot of work trying to establish why.

He said they were now satisfied with the Irish Dairy Board's acceptance that their analysis was credible.