Co-Ops Must Consult With Farmers

Speaking last week in Tullamore, where the third in the current series of IFA regional dairy meetings on the future of the dairy industry was attended by a large number of board members from Glanbia, Arrabawn and Lakeland, IFA officers and dairy farmers from the region, IFA National Dairy Committee Chairman Kevin Kiersey called on co-ops to start urgently comprehensive consultations with their suppliers on the future organisation of supplies post 2015. He added that a growing number of farmers had filled their entire annual quota, and he called on co-ops to adopt a measured approach to early superlevy fines, to minimise cash flow problems for farm families.

“We believe in IFA that to help farmers plan for profitable and orderly expansion, close consultations must urgently take place within co-ops to make sure that on-farm expansion is market led and in tune with both processing capacity developments and our marketing effort,” Mr Kiersey said.

“Farmers will legitimately expect their co-ops and the Irish Dairy Board to go aggressively after new markets on their behalf to find a home for the significant amounts of additional milk we are quite capable of producing economically and sustainably. But I strongly believe that, to protect farmers’ livelihoods during the expansion process, it is crucial that on-farm expansion would be planned to match to those market opportunities,” he said.

“What is obvious from our meetings is that these issues have not been discussed to any great extent beyond some of the co-ops’ boards. There is little time left before 2015 to plan for the future of our industry, and it is crucial that co-ops would urgently engage in thorough consultations with their shareholder suppliers on these matters,” he added.

Adding that this year’s superlevy was an issue for a growing number of farmers because of good production conditions and strong milk prices, Mr Kiersey said: “Concerns from over-quota farmers, especially new entrants, have been voiced at every one of the meetings thus far. There are no easy solutions: farmers may be liable for a 28c/l penalty on every litre of over-quota milk by 31st March 2012 as it appears almost certain Ireland will exceed its quota this year. It is a regrettable, but inevitable fact that some farmers will need to reduce production, and some may even need to reduce cow numbers to minimise the crippling cost of superlevy,” he said.

“However, co-ops can play a vital part in helping those farmers to stay afloat, by applying only a portion of the superlevy fine in the early stages, to secure a reasonable cash flow for farm families, especially when many are now facing the cost of sending children back to school or college,” he added.

“Some co-ops are already levying the full or nearly full extent of the superlevy fine. I believe this is excessive, and that co-ops must adopt a much more measured, and if necessary case-by-case approach to avoid leaving some of their suppliers without income for the next number of months,” he concluded