Milk reduction scheme may be attractive, says IFA

Farmers interested in the new EU milk reduction scheme will have to consider if they can cut their production, in light of their volume/contract commitments (such as liquid milk, winter milk, seasonal peak management, forecasting commitments, etc), advises the IFA dairy team.

They said the scheme may be attractive to Irish creamery milk producers, because it primarily targets production reduction in the last quarter of the year.

However, any farmer wishing to participate will need to apply by September 21 and offer to reduce production in October, November, and December (compared to 2015), for certainty of funding, because applications for later three-month periods will be rejected if the first come, first served scheme is oversubscribed in the first period.

IFA advises participating farmers to make realistic applications, not over-stated strategic ones, because under-delivering on the promised reduction will lead to reductions in payments.

“To decide whether it is worth your while applying for this scheme, you need to weigh up the increased value to your cash flow of higher constituents (and hopefully some further milk price increases) as against the 14.4c/l for the milk you will not produce”, is the IFA advice.

However, payment for the milk reduction might not arrive until early April, 2017.

“Don’t forget that you cannot be paid for reductions higher than 50% of what you produced in October to December, 2015,” dairy farmers are advised.

“Some Irish dairy farmers may wish to avail of the aid to temporarily curb production, and my Department will continue to engage with stakeholders including co-ops and farm organisations now on how best to implement this,” said Agriculture Minister Michael Creed after last week’s EU meeting, where the €500m aid package for the dairy and other livestock sectors was finalised.

IFA national dairy committee chairman Sean O’Leary said Mr Creed and his officials must ensure that everything is ready promptly for farmers to be able to avail of both the incentivised milk reduction scheme and the other €350m EU aid scheme at national level, of which details are awaited.

Mr O’Leary said application forms must be made available urgently before the first reduction scheme application deadline.


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