Superlevy fines could force dairy farmers to quit

HUNDREDS of young farmers face being forced out of dairy farming due to superlevy fines, which may yet cost Ireland tens of millions of euro nationally.

Many co-ops have already exceeded their EU milk quotas by 6%-8% — with six months to go to the March 31 end of the 2011/2012 quota year. Young farmers are the first casualties of fines which could cost individual farmers €30,000 or more.

Ireland has evaded superlevy fines since 2007/08, but paid out €117 million prior to that.

Irish Farmers’ Association dairy chairman Kevin Kiersey said: “I know one young farmer with 50 or 60 cows who closed his production in July and doesn’t expect to ever get back into milk. He had invested heavily and was optimistic, with all the talk of dairy expansion after the end of Europe’s quota regime in 2015. It is a difficult situation. People are coming to us asking if there will be any additional quota available. We are asking the EU to either increase the quota or reduce the penalties, but I wouldn’t bank on it.”

Mr Kiersey said the IFA has asked the co-ops to spread the fines into the following quota year.

Larger co-ops in stronger dairy heartlands are already imposing the 28.6c per litre fines. With co-ops generally paying about 34c per litre, many farmers are already over quota are being paid just 6c per litre, nowhere near covering animal feed and other input costs.

Farm groups including the IFA, ICMSA and others have been warning their members to keep production down ever since March 31, when Ireland kept milk output down to 99.6% of the allowed quota.

That was achieved by weaker dairy areas staying under quota, effectively offsetting over-production elsewhere. However, this quota year, weaker dairy areas such as Connacht are already over quota.

Agriculture Minister Simon Coveney said: “My message has been the same for the past six months, I am very worried about farmers going over quota. For those who have gone over, my advice is to approach Teagasc for advice. We have been exhaustively seeking a solution at European level, but it is very unlikely that any political solution will be found in the current quota year.”

Young farmers led a charge of entrants into dairy farming in the last 12-18 months. The EU has stated that on April 1, 2015, it is to discontinue the milk quota regime introduced in 1984.

Irish farmers were vocal opponents of the production ceiling imposed by the quota regime. Now, entrant dairy farmers, most of them young people, have been drawn to the sector by the prospect of that ceiling being smashed in 2015. However, their arrival is pushing national output towards a superlevy fine.

Alan Jagoe, president of young farmer group Macra na Feirme, said: “It is sadly ironic that we are being forced to limit our milk output at a time when Europe is 7% under quota and people are dying from starvation around the world.

“I was at the Greenfield open day in West Cork yesterday and everyone there was saying that they will not be paid for their milk from now until September. The Government are slow to re-open the EU milk health check because the French and Germans would like to increase the superlevy bill.

“We are going to be crucified by this.”