Dairy farmers warned on costs of expansion

Dairy farmers have been warned to avoid the "social carnage" experienced in Victoria, Australia, when farmers lost control of costs as they expanded. Con Hurley of the Positive Farmers group told the Oireachtas Committee on Agriculture that dairy farmers must learn the lessons from Australia, where farmers did not make the best use of grass and instead ramped up costs by buying feed.

“The social carnage over the last decade has been horrific in terms of physical illness, mental illness, marital break- ups, suicides and that sort of thing,” he said.

Farmers in Northern Ireland had also greatly increased their costs, Mr Hurley warned. “There are going to be serious problems there in the next 15, 20 months . . . at the end of the day we are talking about people, farm families, children, marriages and social cohesion”.

Michael Murphy of the Positive Farmers group said many farm families would have "serious cash flow difficulties" this year, particularly if the milk price did not recover.

Storm of negativity

Martin Keane

, president of Irish Co-operative Organisation Society, which represents the dairy co-ops, said farmers were being hit by “a perfect storm of negativity, with milk prices forecast to be at least 10 cents per litre back on the average for the last year and a half”.

This would take €500 million from the cashflow of farmers and from rural areas.

He said if the European Commission removed the butterfat adjustment, it would reduce the anticipated €100 million super levy bill by one third. “That is technically possible. It was done in 2008.”

Mr Keane also said the Russian embargo on EU food and drink had “dumped a lot of product back on the market”.