Time to fix the milk price model?

Declan O'Connor, a food economist, asks if the dairy sector could benefit from a review of Ireland's current milk pricing mechanism

In New Zealand, Fonterra has adopted a sustainability reward model with their Co-operative difference payment rewarding farmers for on-farm demonstration of care for the environment, animals, people and community.

Some in the dairy industry are starting to ask themselves if Ireland’s dairy milk pricing mechanism needs to be revised to reflect changes in the global marketplace.

While Ireland has already enjoyed success in using the current pricing mechanism to incentivise farmers to boost certain key constituents in their milk, others, notably New Zealand, have adopted pricing mechanisms that also reward farmers for their broader performance.