EU dairy cuts wipe €110m off exports, says agribusiness

Cuts in EU supports for dairy products have wiped €110 million off national export earnings over the last year, agribusiness leaders said yesterday.

The EU Commission has accelerated the rate at which it has been cutting price supports for milk products, including casein, which is an important by-product for the Irish industry.

The supports are refunds to processors and farmers that help to guarantee product prices. The commission plans to cut its budget for dairy market support from €2 billion to €1.1 billion next year.

According to the industry body, the Irish Co-operative Organisation Society (ICOS) and the chief executives of the State's biggest processors, this will reduce supports beyond the levels anticipated under Common Agricultural Policy (CAP) reforms.

The industry said yesterday that the net effect of the reduction in supports has been to cut €110 million in the export revenues generated by dairy processing in this country.

According to ICOS, the reduced supports have forced prices to intervention level, which is the lowest available and meant only as a safety net.

ICOS pointed out that the cuts were also limiting the investment that the individual players could make in expanding their product ranges.

The reforms were originally designed to allow the companies scope to do this while reducing prices at a more gradual rate.

The EU yesterday announced a further reduction in supports that in the case of some products will be €30 per tonne more than expected. Brussels will apply the cuts from July.

An ICOS statement issued last night predicted that these cuts could cost the industry a further €100 million a year.

Yesterday, a delegation comprising Hugh Friel of Kerry Group, Jerry Henchy of Dairygold, John Moloney of Glanbia, Ed Prendergast of Lakeland, and Aaron Forde of Connacht Gold, met the Minister for Agriculture and Food, Mary Coughlan, to discuss the issue.