Not ready for dairy changes
Industrialists would be rubbing their hands at the prospect, but there was a very mixed reaction when this assessment of the Irish dairy industry was published last week in the Prospectus-Promar International consultancy study.
Indeed, one spokesman for the farmers who largely control the industry said the report cost more than €350,000 and delivered nothing.
This verdict from ICMSA President, Pat O'Rourke, seems self-fulfilling; assessment of an industry is worthless, if its owners choose to dismiss it.
The first item on this agenda is the split, with Mr O'Rourke dismissing the report as "flawed", but ICOS, which also represents the owners, saying it must be a catalyst for serious discussion at all levels of the industry.
Mr O'Rourke predicts even lower farm incomes if the report is acted upon. For IFA too, securing viable milk prices is their first objective in any strategic development plan.
These reactions point to the biggest obstacle to Irish dairy industry progress that farmers have come to rely almost exclusively on guaranteed subsidies from Brussels for their incomes, rather than on the potential to increase earnings from their industry, by investing in it.
Farmers can hardly be blamed for that.
The Common Agricultural Policy they have depended on for 30 years has for a long time encouraged the status quo of subsidised farming, rather than the idea of investing one's own money in real business enterprises, operating in real markets, with the hope but with no guarantees of profit.
The Prospectus-Promar International consultancy study says that the current CAP moves towards EU milk prices under 90 cent per gallon can act as an important stimulus for the dairy industry to change its direction.
But farmers cannot be expected to take a gamble with the dairy industry right now, when their futures are already being gambled on, in the CAP mid-term review casino in Brussels.
Sources in IFA correctly point to the impossibility of Irish dairy farmers more than doubling their size in the short to medium term as proposed in the report because the CAP proposals have greatly reduced quota availability for 2003 and 2004.
It could take several years before farmers know where this mid-term review is taking them. Only then, when they have a roadmap for some few years into the future, can they turn their attention to proposals for radical dairy industry changes.
The Prospectus-Promar International consultancy study proposes no more than what has already been achieved by the dairy industries of Denmark and the Netherlands.
But Ireland has missed that bus, and must wait a while for the next one to come around.
When this study is next taken down from the shelf, Irish dairy farmers may be ready for its recommendations.
By then, the CAP will have moved on towards the fate of all insular and protected enterprises, and will be nearer to the inevitable Soviet Union type collapse which awaits all such enterprises.
The signs are there already, with CAP protection having left too many farmers in place, bidding up the price of land and other farm inputs to uneconomical levels.
The mid-term review, the arrival of ten new members and the WTO's advance towards free trade are likely to leave the EU's agriculture policy a common policy in name only, with farmer support gradually shifting back from Brussels to member states.
Surely the Irish dairy industry will be ready for radical action by then. But not all of the 24 companies in assembly, manufacture, marketing and distribution of Irish dairy products can wait that long, according to the Prospectus-Promar International study.
It says some of the smaller processors have successfully grown their businesses and delivered a good return to suppliers and members, but warns that small producers of commodity products cannot remain competitive, even in the medium term.
