Irish farmers’ groups have expressed concern about European Union support for temporary cuts in milk production by farmers in a bid to reverse the plunge in prices that has shaken the dairy industry.
The European Commission said it would soon send member states the proposal which is required as an emergency exception to rules guaranteeing economic competition.
Overproduction of milk since EU quotas were abolished in April 2015 triggered a collapse in prices.
Reacting to the development, John Comer of the Irish Creamery Milk Supplier Association said it could have «potentially serious implications for Irish dairy farmers».
Speaking on RTÉ’s News at One, he said: «Unfortunately for Irish farmers they have invested an awful lot of money in capital infrastructure and in stock and they’re ready set go for production.
«They’re now potentially being told they will have to cap that production.»
He added: «I think that’s an extremely difficult position for people that have made huge investment.»
He said Irish farmers were currently receiving about 24c per litre produced, four cents short of the break-even cost.
EU Agriculture Commissioner Phil Hogan told a crisis meeting of agriculture ministers in Brussels that he was «prepared to propose the application of such rules whereby the Commission … would decide to permit on a temporary basis such voluntary agreements for the dairy sector.»
He added: «The full modalities of this measure have yet to be finalised by the Commission and I expect that we will be in a position to communicate these to MS [member states] very shortly.»
A combination of factors, including changing dietary habits, slowing Chinese demand and a Russian embargo on Western products in response to sanctions over the Ukraine conflict, has pushed down prices for beef, pork and milk.
Around 100 farmers protested outside as agriculture ministers met just six months after the EU announced a €500 million emergency package to tackle the crisis.
Irish Farmers’ Association National Chairman Jer Bergin said that production management proposals «are ineffectual, retrograde steps and must be rejected.
«Production management cannot impact prices, because the EU operates on a market now fully exposed to the vagaries of global weather, geopolitical, economic and supply/demand factors.
«Even if EU producers reduce production, there is nothing to stop other global competitors from further increasing theirs.»
http://www.rte.ie