MEP Luke ‘Ming’ Flanagan (pictured) has criticised agriculture minister Simon Coveney for leading dairy farmers up the garden path to load up with debt and expand milk production after the scrapping of quotas in April 2015.
As a result of lower milk prices due to a glut on global markets, Irish dairy farmers have seen their revenues reduced by €220m, and for the full year of 2015 this decline will be well in excess of €500m, claims Pat McCormack, deputy president of the Irish Creamery Milk Suppliers Association.
“This massive reduction in revenues will not only be felt at farm level but in every business that is dependent on rural Ireland for its business,” said McCormack. “Measures need to be taken immediately to stabilise the milk price situation and provide a level of confidence to farmers to continue to invest in their business.”
Dairy farmers have been blindsided by the sudden drop in milk prices. MEP Ming Flanagan, who represent farmers in the west of Ireland, said that while this it is not the first time that dairy farmers have faced pressure on prices, what is different this time is the very heavy burden of debt that many farm families and young new entrants are carrying.
“Much of this is due to the irresponsible manner in which Simon Coveney, Minister for Agriculture, Food and the Marine, has been relentlessly promoting dairying as a panacea to all the country’s ills,” Flanagan told agri website agriland.ie.
In Association with
Flanagan claims that even before the current price slump, the minister’s over optimistic predictions were not based on the economic reality of the world commodity markets.
“Presently, world consumption for dairy products is increasing at 2% per annum while production is increasing at 4% per annum. All major producing blocs have signalled their intent to increase production,” said Flanagan.
Poor Leadership
“In this climate, for the minister to be advocating and actively promoting a massive 50% increase in production without ever at any stage ‘stress testing’ these plans against either a global price dip or an interest rate rise, showed poor leadership and a lack of understanding of the market.”
The ICMSA is urging the EU Commission to immediately increase the intervention price to 28 cents per litre. However, Flanagan says intervention is a short-term solution which does not address the problem.
“The constant refrain that Ireland has a competitive advantage in producing milk does not stand up to scrutiny,” said Flanagan. “While grazed grass is price competitive, other costs in Ireland are high by international standards and leave Ireland mid-table in terms of production costs.
“The previous government is now held to account for their mismanagement of the construction industry; this minister is a culpable of creating a similar bubble in the dairy industry, the effects of which will be felt for a long time as indebted farmers struggle in silence to stay afloat.”
Simon Coveney: under fire from Ming Flanagan
