19 February 2009

3 minute read

Europe

Padraig Walshe said the Irish dairy sector is set to experience an extremely difficult year in 2009, with the majority of dairy farmers making no income. “The Irish dairy industry is one of our most valuable indigenous industries. It was worth €2.5b in exports in 2007. It employs 9,000 people directly, and an estimated 4,500 more in ancillary services.”

He said the Government must play a very active part in helping secure the future of our most valuable native industry by addressing four issues:

• The challenges to farmers’ cash flow from delayed FWM grants and REPS payments and unco-operative banks must be dealt with.·
• Targeted use of EU market supports to help sustain viable milk prices when markets are weak must be pursued vigorously by the Minister for Agriculture and Food.
• The excessive cost of doing business in Ireland, particularly energy, wage costs and on-farm inspections must be addressed.·

Biosecurity in feed must be increased, with all “low risk” feed mills subjected to the same stringent regime of inspections as all other feed processing plants.

On Farm Waste Management, Mr Walshe said the Government must at the very least cover the interest cost and give farmers a letter of commitment laying out payment schedules. Without this, these farmers will not be able to get credit to carry on their normal farm business.

“We estimate that up to half of the 17,000 farmers still awaiting payment of the Farm Waste Management grant are dairy farmers. Delays in REPS4 payments are also affecting cash flow for up to 4,000 dairy farmers. These farmers submitted their plans last year as required. The Department for Agriculture have had ample time to approve those plans, so there should be no delay in payment.”

Mr Walshe told the Committee that it was absolutely critical that the Minister for Agriculture would press the EU Commission to grant refunds at a sufficiently high level to allow Irish dairy products be competitive on the world market.

The dairy budget for market intervention measures, which amounted to over €1b in 2006, came down to €138m for 2009, an 86% cut – reflecting the slashing of export refunds and skimmed milk disposal aids. In the same period the dairy share of the CAP market support budget has gone from 12.5% to just over 4%.

“A strong argument must be articulated by the Minister to reinstate resources under the various dairy budget headings, particularly export refunds and processing aids.”

On the cost of doing business, Mr Walshe said since last summer, oil prices have fallen from $147/barrel to $35/barrel. Electricity prices rose last year by 30% on the back of increased oil prices. It is time for the Minister for Energy to demand an immediate price reduction of at least 20% in the price of electricity. A similar price cut is equally justified for gas. While farmers are facing the prospect of making no income in 2009, it is a necessity to reduce all costs in the processing industry, including wage costs, from the top down.

TheCattleSite News Desk