Ireland and 14 other EU states have called for a package of measures to protect dairy farmers, who have faced extreme volatility in their incomes.
Minister for Agriculture Brendan Smith yesterday attended the EU council of agriculture ministers, at which the measures were discussed.
“My fellow ministers and I are agreed in calling for additional rapid action at EU level to deal with the very serious situation on European milk markets driven by the global economic crisis,” Mr Smith said.
He said the group of 15 ministers called for a “comprehensive EU approach combining immediate short-term measures along with a medium term strategy to deal with volatility in the milk sector”. This position was also broadly supported by several other countries, he said.
A statement signed by the 15 ministers called for a temporary increase in the intervention price and careful management of the disposal of intervention stocks.
It also sought increased export refunds for butter, milk powder and cheese, “while avoiding any distortions in developing country markets”, Mr Smith said.
The EU ministers are also seeking reactivation of aid for use of milk powder in animal feed, as well as consideration of measures to modernise and adapt the dairy sector.
“In addition to these immediate measures the member states concerned recognised that we must learn from the recent experience of extreme volatility in producers’ incomes.
“In particular we called for existing market management instruments to be adapted and new ones created in order to be able to deal more effectively with such market volatility in future.”
Ms Smith said he and others in the council had expressed “great concern” about the increasing divergence between prices paid to farmers and those charged to consumers.
Irish farmers are now receiving 20 cent per litre of milk. The milk costs on average 26 cent to produce and is being sold hours later in supermarkets at €1.25.
The ministers supported recommendations from a high-level group to examine the balance in relationships between retailers, processors and producers and to improve the transparency of price formation at every stage in the food chain.
Farm organisations have sought meetings with Mr Smith to discuss EU proposals on the dairy industry that would allow member states aid dairy farmers.
The Dairy Market Situation report, drawn up by EU experts, suggested loans or state aid up to €15,000 could be given to farmers with liquidity problems. It also pledged to continue using market supports such as export refunds for dairy products and said it would use all its powers to stop anti-competitive measures in the dairy sector.
The proposals, discussed at yesterday’s meeting in September, had a mixed reaction from farming and political sources today.
The Irish Creamery Milk Suppliers Association (ICMSA), which opposed the EU’s recent decision to allow farmers produce more milk under the quota scheme, called on those who support a supply-management system to state that publicly and demand a change in policy from the Department of Agriculture while there was still time to rescue our own and Europe’s dairy sector.
ICMSA president Jackie Cahill said in July the EU report “amounts to no more than an abdication of responsibility for a disaster that was entirely of their own making”.
Farmers last week milked cows outside Government Buildings in Dublin as part of the ICMSA campaign to highlight the chaos and collapse of the Irish dairy sector. Over a hundred farmers from all over Ireland joined the protest by handing out free cartons of milk to the public.
The ICMSA estimates farmers have lost €1 billion in income this year.