Farmers Worried About Sustainability of the Gii Model – Healy

Speaking ahead of a meeting this afternoon with Glanbia at which he will lead an IFA Dairy Committee and County Chairmen delegation, newly-elected IFA President Joe Healy said Glanbia suppliers were genuinely questioning the level of base milk price being paid by GII, which has been consistently lower than other milk purchasers.

“Farmers are disillusioned with a system which was supposed to apply the co-op ethos to milk purchasing and remove the pressures from the Plc. It requires top ups to pay farmers a price about on par with other co-ops, which are unsustainable in the long term,” Mr Healy said.

“This has come to a head with the March milk price cut. GII is now paying producers 22c/l (a further 2c/l comes through a combination of a top up from the co-op top and a one-off Ornua bonus). Glanbia needs to review this situation, and to stop the rot. That’s why we are meeting them today,” he said.

IFA National Dairy Committee Chairman Sean O’Leary added: “Farmers are questioning seriously the model pursued by the Irish dairy industry generally, which ultimately leaves farmers exposed to most of the risk of volatile prices. More and more dairy farmers are producing milk below the cost of production: Dairygold have followed Glanbia’s lead and reduced their March milk price to 23c/l”.

“While our dairy processors and exporters are reporting profits, we need a fair share of margins for the sector to be sustainable.”

“Glanbia suppliers are incensed that GII is paying them 1.7c/l less than the Ornua PPI which suggests a March farm milk price of 23.7c/l incl VAT. GIanbia Co-op is using farmers’ resources to subsidise their base milk price. This will require the spin out of more Plc shares to be sustained for any length of time. This is not acceptable to farmers as a viable strategy,” he said.

The IFA President will travel to Brussels in the morning to attend his first meeting of the COPA Praesidium. Joe Healy said he would be meeting other farm leaders to mount strong opposition to any Mercosur trade deal and build support for IFA’s campaign to abolish import tariffs on fertiliser.

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