June 16th, 2010

High Level Group Provides No Solution to Dairy Sector Problems  -  ICMSA

IThe proposals from the EU High Level Group on dairy contain no real solutions to the problems in the EU dairy market.  However, some of the proposals and recommendations in the Report if implemented would be detrimental to the interests of Irish dairy farmers and the whole dairy sector, according to Mr. Jackie Cahill, President of ICMSA.

The proposal will not in themselves give a viable milk price to farmers or reduce price volatility.  In summary, the High Level Group is recommending full deregulation of the EU market without any mechanism to prevent abuse by dairies and/or retailers.    At a time when countries and society generally are reaping the downsides of deregulation in the banking and financial services sector, the Commission are going down the same road in the dairy sector.

Mr. Cahill said that the removal of quotas will no doubt create the potential for expansion of milk production in Ireland.  However, the danger of over supply of milk could again cause a nose dive in milk prices as happened in 2009.  Irish dairy farmers simply cannot tolerate a return to milk price in the low twenties.

The proposal on contracts between producers and dairies which may be made mandatory in some Member States could result in local production being favoured over production from other Member States.  This would create a major obstacle for any increase in profitable milk production in Ireland and Mr. Cahill said that it would be naïve for the Irish dairy industry to build expansion on the basis of exports outside the European Union.

ICMSA has consistently stated that they must be some effective mechanism at EU level to balance supply and demand.   With the ending of quotas, there will a void in the mechanisms available to the Commission to avoid a repeat of the 2009 disaster.

Mr. Cahill concluded by stating that the High Level Group Report is not legally binding and that any decisions will require a co-decision by the Farm Council and the European Parliament and he said that the Commission in drawing up their proposals should have full regard to the report from the European Economic and Social Committee and a report from the European Court of Auditors which called for supply management to ensure a sustainable milk price and income for milk producers.

Ends.    16 June 2010

Jackie Cahill,    087-2820663
ICMSA President.

Or

Cathal MacCarthy,    087-6168758
ICMSA Press Officer.

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