VIDEO: Dairy fund of 2.7% off all farmer payments rejected

The Milk Bucket Challenge, highlighting the financial difficulties of dairy farmers, is catching on across the world.

The challenge has gained momentum in the UK with groups like Vale Farm Vets, in Cullompton, Devon, and with promotion by the Farming Community Network, a charity supporting UK farm families.

Irish co-ops have shot down an EU dairy rescue plan which would involve a deduction from EU payments to all farmers of as much as 2.7%.

“We do not advocate the activation of the CAP Crisis Fund which comes out of farmers’ direct payments, that could result in a modulation of payments to all farmers of up to 2.7%,” said a spokesman for ICOS, the co-ops organisation.

Meanwhile, dairy farmers were encouraged by Tuesday’s first price rise since March in the GDT auction conducted by New Zealand’s Fonterra, the world’s biggest dairy exporter.

A 14.8% rise was seen across all products except butter milk powder and lactose, but a 20.7% drop in produce sold may have affected the surprise outcome, and global prices are still near a 13-year low.

It came too late to prevent July milk price cuts by Irish co-ops. The biggest milk buyer, Glanbia Ingredients Ireland (GII) reduced their price by 1 cent per litre (cpl) to 25cpl. Glanbia Co-Op members who have signed a Milk Supply Agreement get an additional 1.5 cpl support payment for manufacturing and liquid milk supplies.

The Dairygold and Arrabawn co-ops have cut price by 1.5c, Kerry cut its base price 2c, Lakeland Dairies cut by 1c.

Meanwhile, Aldi and Lidl have been urged not to forget their Irish milk suppliers, following their promise to pay UK dairies the equivalent of 38 cents per litre for milk on sale in their stores.

VIDEO: Dairy fund of 2.7% off all farmer payments rejected

ICMSA Deputy President Pat McCormack said that Irish milk suppliers are entitled to expect the 28p (sterling) per litre which Aldi said it will pay its UK suppliers — Arla, Dairy Crest, Muller Wiseman and Graham’s the Family Dairy — and which Lidl said it will match.

Mr McCormack said the 28p UK price translates to 38c in Ireland, 12-13c more than most Irish dairy farmers get.

ICOS says the EU can help the dairy industry in the short term by creating export demand, strengthening the market safety net, bringing forward farmers’ direct payments, improving trade relations with Russia, and investing super levy funds in agri-investment.

The co-ops have also called for longer term measures — assisting farmers with volatility and risk, strengthening producer co-ops in the food chain, and research and innovation to add value to milk.

According to ICOS, there are export opportunities in East Asia, Iran, and Brazil, and superlevy money should used to develop them.

ICOS urged flexibility in Private Storage Aid and Intervention, but said a more realistic intervention price cannot be delivered in time to address the current market situation, due to legal issues.

Deferral of this year’s farm tax bills (already announced in France) would help farmer liquidity. ICOS said super levy funds should also go into the ‘Hogan Fund’ EIB plan for agri-investment, or to top-up farm grants like TAMS, or fordairy farmer training.

Noting that some dairy farmers in the UK, who are not in co-ops, are on ‘B contract’ rates of as low as 7p per litre, a spokesman for ICOS said, “The EU and the Irish government need to back farmer training to be able to participate fully in their co-ops as active members and directors”.

ICOS has also rejected re-introducing milk quotas to tackle the current European crisis, which has been called for in some member states.

A spokesman said, “It is an antiquated system which is of absolutely no use in a globalised dairy trading world where we cannot control supply in other regions.

“In fact, Canada remains the only significant dairy bloc in the globe with a supply management system, and even that is creaking badly, with farmers exiting dairy in increasing numbers.”

“The reality is that this is a ‘demand’ driven crisis with Russia and China off the market for different reasons.

“With future population growth of the globe driving demand into the next generation for European dairy enterprises, it would be criminally stupid if we misunderstood the problems and resorted to ineffective and costly local supply management measures to try and control world dairy prices.”


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