E.U. COMMISSION’S REPORT WILL DO NOTHING FOR DAIRY FARMERS – I.C.M.S.A.

The EU Commission’s Report ‘Dairy Market Situation 2009’ confirms our worst fears. The EU Commission’s prediction and possibly their hope that up to fifteen percent of dairy farmers will go out of business in 2009 will become a reality unless our Taoiseach and Minister for Agriculture, Fisheries and Food form new alliances immediately to force a policy change at EU level, according to Mr John O’Leary, deputy president and chairperson of ICMSA’s dairy committee.

This report clearly shows that the EU Commission itself has absolutely no intention of introducing measures that will increase milk prices unless serious political pressure comes from the EU Council of Ministers for a radical change in policy direction that will return a reasonable milk price to farmers.

It is quite clear, Mr. O’Leary said, that the EU Commission’s intention is to support milk price at about 20 cent per litre and their solution to the current problem is to cut supply by attrition, that is by forcing dairy farmers out of business through low prices.

Fifteen percent of dairy farmers in Ireland represents 3,000 jobs and families in rural areas, their demise will be reality unless our Government act immediately to protect these people’s interests and not leave them to the mercy of the world dairy markets where Irish dairy farming simply cannot survive.

The peak months of 2009 have already passed with an absolutely terrible milk price that will not go close to covering their costs of production and will not meet the bills for the rest of this year. Compared to the average price in 2007, the income loss for a 250,000 litre milk producer in 2009 will be €32,250. Such losses are simply not sustainable.

ICMSA, Mr. O’Leary said, clearly set out its position to the Taoiseach at a recent meeting that long-term damage is now being done to the sector in particular for dairy farmers who have invested heavily to secure their future in the sector. The ultimate responsibility for this disastrous situation rests squarely with the EU Council of Ministers.

The EU Commission must be forced immediately to use the price supports available to it (intervention, export refunds and internal supports) to raise milk prices.

In the long term, Mr. O’Leary said, that a total reversal of the CAP Health Check policy agreed in November 2008 is required. The policy agreed is disastrous for Ireland and farm families will simply not be able to survive under such a policy.

The French and German Governments have acknowledged this by seeking a change in direction in policy. Ireland had traditionally supported the French in agriculture negotiations and ICMSA believes that we should now realign ourselves again with French dairy policy and seek a policy based on supply management and price supports, concluded Mr. O’Leary.

MINISTER SMITH WELCOMES CHANGE TO CHEESE EXPORT RULES

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD, welcomed the EU Commission’s positive response to his request to amend regulations governing the export of cheese from the EU.

Prior to the amendment, a minimum ‘free-at-frontier’ cheese threshold price was set at €2,300 and product valued below the threshold was not eligible for an export refund. In the current market situation where cheese prices have reduced considerably the price threshold was no longer relevant nor justified.

The decision to remove the free-at-frontier price allows the activation of export refunds when cheese products are exported outside the European Community.

Minister Smith has been pressing the Commissioner to review the price threshold since the early part of the year in bi-lateral contacts and at meetings of the Council of Agriculture and Fisheries Ministers.

Speaking after the decision was taken at the milk management committee meeting in Brussels, the minister said, “I am pleased to note that the Commission today decided to remove the free-at-frontier threshold price for cheese exports, which I have been requesting for some time. This has the potential to assist increased volumes of exports of Irish cheese onto world markets and to stimulate fresh demand”.

The minister stressed the importance of utilising all available measures to improve exports in the current depressed dairy market.

“This amendment is an example of how a pragmatic approach to the application of the community regulations can have a direct beneficial effect. I will continue to press for the introduction of appropriate supports as the opportunities arise”.

SUPERMARKET WAR WILL INFLICT DAMAGE ON AGRI-FOOD SECTOR

IFA president Padraig Walshe said the fallout from the race to the bottom in the supermarket/retail war was having devastating consequences on farm prices and incomes, threatening job losses in the agri-food sector and undermining our future agricultural production base.

Padraig Walshe said the ultimate goal in the retail war was about the powerful supermarkets retaining their market share and exorbitant profits by forcing price cuts back down the food chain onto primary producers and processors.

The IFA president said consumers needed to be aware that supermarkets are not reducing their massive profit margins, but simply passing back all the price reductions down the food chain.

Mr Walshe pointed out that farmers cannot produce high quality, safe food at prices below the cost of production. He said there is a major lack of regulation in the retail sector and IFA has proposed a new supermarket code of practice and ombudsman for the sector. Padraig Walshe pointed out that at present farmers are receiving 50% less for a litre of milk compared to 18 months ago.

The price of beef has fallen by €133 per animal compared to last year and grain farmers are looking at prices that we haven’t seen the mid-1970s.

He said the facts are farmers are now producing at below the cost of production and this is simply unsustainable.