Mandatory milk output cuts unwise, warns IFA
The council is reviewing proposals put forward by French, German and Polish ministers for EU-wide cuts to milk output as a possible solution to the dairy income crisis facing EU farmers.
However, Mr O’Leary said such cuts would damage investments made by Irish dairy farmers, and would not help to rebalance markets any faster.
He said better short-term solutions to help farmers would be market and income/cashflow supports, such as targeted aids funded from superlevy; easier and cheaper access to EU funds; more flexible intervention and private storage measures.
“For the medium to longer term, it is vital that the relationship between producers and processors would encourage better communication of real-time market signals, to empower farmers to make well-informed decisions on production volumes.
"I have suggested our co-ops should engage with farmers to outline a level of output for which there is demand at a price which will at least cover costs. The fixed-price contracts brought forward by some co-ops are a first step in that direction,” said Mr O’Leary.
“Equally important will be to equip dairy farmers to cope with, and even thrive, through future episodes of volatility, with risk-management tools such as greater levels of fixed-price contracts and other price-hedging methods.
"They will also need to volatility-proof their income and cash- flow management through flexible taxation and lower cost, income-responsive investment and cash-flow finance,” he said.
