Ireland dairy industry struggling to gain EU support

Ireland is struggling to build support at EU level for a more practical approach by the Commission to the crisis in the dairy sector.

 

Agriculture Minister Brendan Smith has urged for greater use of dairy management tools, such as intervention, export refunds and aid to private storage, to support the sector in the current difficulties.

 

While France is likely to support Ireland, Minister Smith admitted that there was "no mad rush to support Ireland" from other member nations.

 

The ongoing difficulties in the dairy sector will top the agenda at crucial meeting between Minister Smith and Commissioner Mariann Fischer Boel, which takes place against a backdrop of growing uncertainty in the industry.

 

Milk prices across the EU have dramatically fallen and processors have warned of further cuts unless global dairy demand improves.

 

The minister has promised to press for more support from the Commission. The French government has expressed support for the Irish position and Minister Smith will meet with his French counterpart, Michel Barnier, before his discussions with Fischer Boel.

 

The EU Dairy Management Committee last week decided against increasing the export refunds on whole milk powder and butter, while the refunds on skim milk powder rose marginally amid mounting political pressure for increased intervention in the markets.

 

The management committee claimed that world dairy markets had "stabilised, albeit at low levels''. However, this view is opposite of the Irish position, with Minister Smith insisting that the proper use of market controls would enable the Commission to guide the sector through the current crisis.

 

Speaking at a COPA meeting in Brussels last week, IFA dairy chairman Richard Kennedy said there was common ground among dairy producers across Europe regarding the need for market supports for milk prices.

 

Kennedy claimed that there is "a crisis of unprecedented scale in milk production all around Europe. All our colleagues have confirmed that milk prices are falling, and are now substantially below production costs. This situation is unsustainable and underlines the importance of urgent action."

 

Kennedy added that the minister must build alliances and pursue the necessary measures to stabilise the markets and support the incomes of dairy farmers. However, ICMSA president Jackie Cahill warned that the current difficulties in the dairy industry cannot be solved solely by taking excess volumes of produce off the market.

 

He said an effective supply management system was also needed as all dairy farmers in Ireland now accept that profitable dairying can only be achieved by a regulated sector.

 

Cahill claims that they are "reaping the pain of the policy madness that held that there was a natural market for unlimited production."