THE CRISIS facing the Irish dairy industry could see thousands of farmers quitting the sector and damaging its entire viability, the Joint Oireachtas Committee on Agriculture heard yesterday.
John Tyrrell of Icos, umbrella group for the co-operative movement, told the committee that prices being paid to producers were at “unsustainable levels”.
“The co-operatives supported the milk price very strongly in 2008 at levels well above the market returns. This support could have been €100 million in 2008,” he said.
President of the Irish Farmers’ Association Pádraig Walshe said the majority of the 20,000 dairy farmers will fail to break even this year and will make a loss.
“The problem is farmers cannot continue to produce milk at a loss and will be forced out of dairying and this in turn will place the entire processing sector in jeopardy,” he said.
There was general agreement from the groups making submissions, the Irish Co-operative Movement, the Irish Creamery Milk Suppliers’ Association, the IFA, Bord Bia and the Irish Dairy Board, that the industry faced unprecedented challenges.
The main challenge was the low price being paid to producers because processors were not able to get the returns from world markets into which Ireland sells €2.2 billion worth of exports, because of falling prices.
In addition, the removal of market supports by the EU and the ending of the milk quota system in 2015 were also creating difficulties but, according to Michael Cronin, chairman of the Irish Dairy Board, they would also create opportunities.
However, Jackie Cahill, president of the Irish Creamery Milk Suppliers’ Association, attacked the Department of Agriculture for failing to heed his advice on accepting recent EU policy changes. This, he said, had led to “unprecedented problems” which have seen the price farmers are receiving for milk fall from 39c a litre in January 2008 to below 25c a litre in January 2009.
He demanded accountability from the people who had brought about the collapse of the market by agreeing to an end to the milk quota system and the phasing out of EU marketing supports.
“Not alone have dairy farmers been misled but decisions that impact on us have been taken on spurious guesswork and nonsense paraded as policy,” he said .
“Some of the people who were involved in this are well-paid public servants within Teagasc and the Department of Agriculture and are now silent as they continue to enjoy well-paid jobs and their pensions are secure,” said Mr Cahill.
He and Pádraig Walshe complained the banks had been less than co-operative with farmers in extending credit to farmers, many of whom would not be paid for work done under the Waste Management Scheme.
Both Mr Cronin and Aiden Cotter of Bord Bia said there were potential market opportunities in the European, Russian and Asian markets.
Mr Cotter said the medium- to long-term prospects continued to be broadly positive albeit with the potential for significant volatility.
Mr Tyrrell said current markets were exceptional and demanded exceptional response from the EU.
There was also agreement Ireland needed to lessen its dependence on butter production and increase its output of cheese.