EU threw away €197m of Irish farmers’ butter in 2002
Irish agriculture is facing its biggest upheaval in decades with thousands of jobs in production and processing on the line. Figures released yesterday reveal a shocking level of waste in the EU with Irish farmers contributing hugely to waste butter and milk.
For example, last year Irish farmers produced 103 million lbs of butter for intervention to be added to the butter mountain. Based on the €1.90 Tescos charge for a pound of Kerrygold butter, Irish farmers alone produced €197m worth of wasted butter last year.
Last year Irish farmers produced 50,000 tonnes of skimmed milk powder for intervention i.e. not for sale. That's €50m worth of waste milk based on the world market price of €1,000 per tonne.
For producing butter and milk which would never be consumed by the market, Irish farmers were paid €1.5bn in subsidies and direct payments.
The CAP reforms announced yesterday are aimed at ending this monumental waste across the EU. Up to now farmers got more money if they had more stock, irrespective of whether they could sell the stock or not, which led to butter mountains and milk lakes.
From now on they will be expected to produce for the market, producing only the quantity and quality consumers are willing to buy.
From 2005 farmers will receive a cheque in the post once a year to replace most of the existing premia.
Dairy farmers and the dairy industry accused Mr Walsh of selling them out and said the deal was a disaster for them. Some predicted losses of upto 40% in income. However, Donie Cashman of the creamery suppliers' group, ICOS accepting the reforms said: "This is the reality."
Beef farmers were less pessimistic but the attractiveness of getting a cheque in the post once a year for giving up their stock and doing nothing could leave meat factories short of animals to process.
A recent study carried out for the minister predicted a 16% fall in production which is considered to be a conservative figure.
The deal reached early yesterday morning following three weeks of on-off talks and a grinding all-night negotiating session is the most radical overhaul yet of the 45-year-old CAP.
Countries will have a choice of how they operate the scheme and in some instances will continue to receive partial subsidies. Mr Walsh will decide with the farming organisations over the next few weeks what option they will take in breaking the link between payments and production.
Farmers will have to abide by a list of requirements such as respect for the environment, food safety, animal and plant health and animal welfare standards.
There will be a reduction in direct payments for bigger farms and the money will be used to finance a new rural development policy in an effort to keep people in rural areas.
The Irish dairy industry has relied heavily on the EU buying their butter and storing it in intervention. That will be phased out by 2008 and there will be a 25% cut in the intervention price.
"Dairy farmers have five years to get closer to the market", said Mr Walsh who succeeded in increasing the amount of butter that will be taken into intervention in the meantime.
Mr Fischler asked about the effects on the Irish dairy sector said: "They have to realise there are other dairy products for their milk besides butter."
Fianna Fáil TD, and former Junior Agriculture Minister Ned O'Keeffe said he was very concerned at the cuts and warned of future job losses in the dairy heartlands of Munster.
"It was the worst deal ever concluded for the dairy industry. There's no future for the smaller producers who have experienced significant milk price cuts since 2001," he said.
Fine Gael spokesperson Billy Timmins, TD, said Joe Walsh had accepted a bad deal and he must now account for his decision.
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