Europe's largest milk producers are pushing for more agressive supply control measures, including the possibility of mandatory cuts in production, to address the current price slump, a move which Ireland opposes.
At a Farm Council meeting in Luxembourg on Monday, Germany, France and Poland, which between them account for about 40 per cent of Europe's milk output, also mooted the possibility of tying new supports for farmers to reductions in output.
The latter measure would have been unthinkable a year ago when the industry celebrated the ending of quotas and reflects the severity of the current crisis, which has resulted in a near 40 per cent crash in prices.
The downturn was initially blamed on a combination of falling Chinese demand, the Russian trade embargo and a general glut in global production but more laterally post-quota production in Europe has been singled out as a chief cause.
Ireland, which has had one of the largest post-quota increases in milk production, is adamantly against production cuts and is urging the Commission to introduce additional supports for farmers until the market turns.
Minister for Agriculture Michael Creed called for maximum flexibility for member states, including Ireland, to be factored in to the dairy aid package currently under consideration by the Commission.
Referring to the proposed supply control measures, he said “that any action we take must not place our farmers at a disadvantage when the market shows signs of recovery”.
The jury is still out on whether the market has bottomed out with the latest Global Dairy Market auction, which sets prices internationally, recording no change in average prices.
Speaking at the meeting in Luxembourg, Mr Creed said he had urged agricultural commissioner Phil Hogan to consider the deployment of a further targeted aid package, similar to that provided last September.
“This gave considerable flexibility to member states to adopt responses suited to their national circumstances,” he said.
The Irish Farmers’ Association (IFA) said unilateral EU production cuts would not resolve the current market slump nor would they constitute a viable strategy to deal with future volatility cycles.
“Such measures would discriminate against, and could damage significantly, the Irish dairy sector, and the investment made by Irish dairy farmers, without actually helping to rebalance markets any faster,” IFA dairy chairman Sean O’Leary said.
