Fianna Fáil Agriculture Spokesperson Éamon Ó Cuív has said reports that the European Commission will agree to introduce voluntary milk supply controls at Monday’s EU Council of Agriculture Ministers meeting is a very worrying development.
France has been demanding heavily that the Commission introduce such supply management measures to deal with current dairy price volatility.
Deputy Ó Cuív said: “From an Irish perspective, bringing in such milk supply controls, even if voluntary, represents a dangerous precedent in compensating for reduced production.
“Firstly, Ireland is heavily dependent on exporting dairy product to global markets. 90% of all milk produced in Ireland is exported. Ireland produces about 5.5 billion litres of milk per year; while in 2015 total dairy exports were worth in the region of €4 billion in value.
“Such supply measures in Europe do not make sense as it will leave other non-EU countries free to produce and enhance market share. While the measures are beneficial for France with an internal market of over 60 million people, this will hit exporting countries like Ireland, especially our capacity to take advantage when an upturn in the market takes place.
“What is more, the world market for dairy increases by 15 billion litres every year, almost 3 times our total annual production.
“Secondly, these voluntary measures are just the thin end of the wedge. It will not be difficult to transition them to a compulsory nature if the market deteriorates further in the immediate short term. A worst case scenario would see Irish farmers’ penalised through a levy for increased production to compensate continental European farmers for reduced milk production.
“It is vital that the Irish government upholds Irish dairy farmers’ interests at Monday’s meeting and build support with other like-minded Member States to resist this proposal.
“It is also imperative that Ireland push at EU level for a review of price intervention tools in the dairy sector in order to deal with the current market volatility and low prices crippling dairy farmers. The essential floor for support should be increased from 21 cent to the cost of production per litre to the average EU production cost.”