Coveney aiming to milk lifting of quota

Ireland aims to be the world’s fastest-growing dairy producer when the cap on milk production is lifted by the EU in two weeks, said Agriculture Minister Simon Coveney.

He rubbished fears that the ending of the milk quota system in the EU after more than 20 years would mean a surge in production, depressing the price and leaving farmers in trouble.

Instead, he said, Ireland would not look to increase exports to the rest of the EU, but will target the growing markets for dairy products in Africa and Asia.

The doubling from around 5bn litres of milk a year over the next five years will create an additional 10,000 jobs in rural Ireland he said.

However, he expects that the growth in dairying will not be static but will continue over the next two decades, creating opportunities, not just for dairy farmers, but for the whole processing industry.

“When we abolish milk quotas right across the EU in two weeks’ time, for the first time since 1983, Irish farmers will be able to expand and grow to what the market is demanding, as opposed to a supply-control policy that has operated in the EU,” said Mr Coveney. “This is a very exciting opportunity for Irish dairy farmers and we are planning to be the fastest-growing dairy producer on the planet for the next 20 years.”

When the quota system was introduced in an effort to maintain high prices for farmers, Ireland and New Zealand both produced the same quantity of milk, at 5bn litres.

Now, Mr Coveney said, New Zealand is producing four times that, at 20bn litres, and prices have also increased.

“We cannot pretend that what is happening in the EU means that prices will collapse,” he said. “This ignores what is happening outside the union, in other continents such as Asia and Africa, where we are seeing dramatic increases in dairy consumption, and Ireland will be looking to expand to export outside the EU.”

Eight countries, including Ireland, must pay fines for over-production over the past 12 months and last week Agriculture Commissioner Phil Hogan announced that, for the first time, they would be able to pay over three years, interest-free. Ireland’s fine is about €10m, which works out at 28 cents a litre for farmers.

Scottish farmers and some others who did not over-produce were not in favour of this measure, believing that dairy producers, rather than having to pay the fines immediately, would put the money into increasing production, reducing the price of milk to unsustainable levels.

Mr Coveney said he did not accept this argument.

“What will determine dairy prices is consumption in China, drought on the west coast of the US, events in Russia, political issues like the ban in Russia, and not whether Ireland produces a little more milk,” said Mr Coveney. “Ireland’s increase will be very small, relatively.”

EU agriculture ministers reviewed progress towards the ending of the quota system at their meeting in Brussels yesterday.

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