MINISTER’S DAIRY FORUM MUST FOCUS ON FARM PROFITABILITY AND VOLATILITY

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MINISTER’S DAIRY FORUM MUST FOCUS ON FARM PROFITABILITY AND VOLATILITY
05 Mar 2015

MINISTER’S DAIRY FORUM MUST FOCUS ON FARM PROFITABILITY AND VOLATILITY

Dairy

Speaking after attending yesterday’s Daíl debate on dairy, at which Minister for Agriculture Simon Coveney announced the setting up of a Dairy Forum, IFA National Dairy Committee Chairman Sean O’Leary welcomed the move, which he said could help plot the way into the post-quota era for the sector.

O’Leary said the Forum must help co-ordinate the sector’s growth strategy for the coming years, and it must focus on farm profitability and managing income volatility. He said IFA would take full part in the Forum to influence its activity in this direction.

“While it now seems that the fall in milk prices and incomes for 2015 may not be as severe as first thought, it will remain a very challenging year of low milk prices, relatively high costs, superlevy fines and hefty tax liabilities. Coupled with farmers’ investment commitments, both on farm, and to support the development plans of their co-ops, this year will be very challenging for most dairy farmers,” Mr O’Leary said.

“It is crucial that our Minister for Agriculture Simon Coveney and EU Agriculture Commissioner Phil Hogan would work hard in Brussels to obtain the prompt delivery of the proposed 3-year extended payment scheme for superlevy. Commissioner Hogan must also capitalise on his ability to bring forward this proposal to seek political support for some level of reduction, such as by removing the butterfat corrector from the calculation formula for superlevy. Both men must also initiate a review of EU market supports, to ensure they are revalued to keep pace with production costs,” he said.

“To ensure the sector delivers fully on the Food Harvest 2020 jobs and earnings growth targets, the new Dairy Forum must focus on helping farmers manage the “new normal” of potentially extreme price and income volatility in the dairy and all other farming sectors. To this end, IFA has made detailed proposals to improve the taxation options available to farmers, and in addition have encouraged industry to develop risk management methods, for example indexed fixed price contracts such as Glanbia’s. While the extension of the income averaging to 5 years is a welcome development, there is substantially more Government can do to help farmers in the area of taxation,” he added.

“The Minister’s Forum must also be used to put pressure on banks to provide farmers with investment products with flexible repayments taking account of income variations,” he said.

“Lastly, it is vital that Teagasc, as an independent research and advisory service of great value to farmers, be fully and properly resourced to be able to increase its services to farmers to include not only best farming practice at every level, but also financial management training,” he concluded.

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