Dairy farmers to outline cashflow challenges at Dáil debate

Managing market volatility and supports for farm incomes must be central to this week’s Dáil debate on the challenges facing the dairy sector, said IFA dairy chairman Seán O’Leary.

Members of the IFA’s national dairy committee are to attend the Dáil’s dairy debate on Wednesday. They will push for the prompt delivery of the EU’s proposed three-year extended payment scheme for superlevy fines, plus tax measures to help dairy farmers navigate through anticipated periods of low milk prices in the coming years.

“While it seems the fall in milk prices and incomes for 2015 may not be as severe as first thought, it will remain a very challenging year of low milk prices, relatively high costs, superlevy fines and hefty tax liabilities,” said Mr O’Leary. “Coupled with farmers’ investment commitments, both on farm, and to support the development plans of their co-ops, this year will be very challenging for most dairy farmers.

“It is crucial that Minister for Agriculture Simon Coveney and EU Agriculture Commissioner Phil Hogan would work hard in Brussels to obtain prompt delivery of the three-year extended payment scheme for superlevy. Commissioner Hogan must also capitalise on his ability to bring forward this proposal to seek political support for some level of reduction, such as by removing the butterfat corrector from the calculation formula for superlevy.Both men must initiate a review of EU market supports, to ensure they are revalued to keep pace with production costs.”

The IFA is urging the EU to reduce the fines facing farmers by eliminating the butterfat correction from the superlevy calculation after March 31. The IFA also wants dairy co-ops to factor in the EU’s three-year superlevy repayment proposal, ensuring no more than one-third of the fine is recouped from farmers in any one year.

Meanwhile, ICOS president Martin Keane has urged the Government and EU authorities to take account of the cashflow pressure likely to be felt on many dairy farms in 2015 arising from a combination of weaker markets, the ongoing Russian ban, and investment in expansion.

Mr Keane said the prospect of European farmers paying up to €2bn in superlevy fines into the general EU budget in 2015 was particularly unjust.

He welcomed the EU’s three-year repayment proposal, but stressed that the details and workings of the proposed new scheme will need to be clarified immediately as co-operatives are currently implementing the provisions of the existing superlevy scheme.

“Last year, Irish co-ops were the first in Europe to pursue internal schemes to spread the superlevy cost,” said Mr Keane. “However, ICOS also continued to push for an official EU approach, which would alleviate the burden on co-ops and their members. This latest announcement is very welcome, as it will give a boost to farmers’ cashflow and allow them to continue to develop their enterprises.”


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