03 Sep 2015
MINISTER AND COMMISSIONER MUST DELIVER ADDITIONAL DAIRY SUPPORTS TO HELP FARMERS MANAGE EXTREME MARKET VOLATILITYBrussels, Dairy
IFA National Dairy Committee Chairman Sean O’Leary said that speaking to colleagues from all over Europe at a meeting of COPA this week had confirmed the majority of EU dairy farmers were now producing milk at a loss.
While this week’s 10.8% rise in the GDT auction is confirmation that global markets are now on the way to recovery, market returns remain well below production costs, and Minister for Agriculture Simon Coveney and Commissioner Phil Hogan must deliver urgent additional measures to support farmers in the immediate term. Mr O’Leary warned “We will not accept further delaying tactics by the Commissioner, who for the last number of months has played for time denying the crisis and waiting for market recovery”.
“Many European dairy farmers, including Irish farmers, are now under serious financial stress. The current market downturn has lasted longer than anyone expected, and without additional support, not even the most efficient farmers can cope. Extreme volatility is now the norm in the dairy sector, and it is essential that the EU would adjust its implementation of market supports in recognition of the massive and damaging impact volatility has on dairy farmers’ incomes. This must start with immediate action at next Monday’s Agriculture Council to support farmers through the current severe and prolonged downturn,” he said.
“For the short term, we need to see the EU Commission review the intervention price levels as they are obliged to do by law, with a view to increasing the safety net to levels more reflective of production costs. It must also re-open APS for cheese and maintain ongoing access to APS as well as intervention for SMP and butter. This would send a strong message to global markets that products cannot be bought at unsustainable prices and I am clear this would help speed up the necessary market recovery,” he said.
“There is also a real opportunity to use the EU superlevy fund of more than €800m to support markets in the short term in order to minimise the use of the Crisis Fund, and therefore any reduction to farmers’ basic payments,” he added.
“To help cash flow rapidly, the EU Council must also agree to the maximum possible early payment of the BPS,” he said.
“Other longer term measures are also needed, because volatility is a feature of global dairy markets. The EU Commission must work hard at removing obstacles to imports of European dairy products especially in Asian countries including China, re-open trade with Russia and negotiate favourable trade deals,” he said.
“We’re very clear in IFA: Minister Coveney and EU Commissioner Hogan must deliver urgent support measures at the EU Agriculture Council next Monday, and start a longer term review of intervention and other supports to volatility-proof them,” he concluded.