Urgent action by the European Commission to support the dairy market was called for yesterday by the managing director of the Glanbia food group. Mr John Moloney told shareholders at the company's annual general meeting in Kilkenny what they already knew, that a sharp drop in international markets was causing an income crisis for many farmers.

International dairy commodity markets, he added, continued to be very difficult and no recovery was envisaged for several months at least.

A large group of farmers protested outside the meeting at the Newpark Hotel about issues including milk prices. Mr Moloney said later it was "understandable" that producers would want to highlight the position "both to us and the community at large".

Actions the European Commission could take, he said, included an increase in the volume of skim milk to be taken into the intervention. The present limit of 109,000 tonnes would be met by July.

Despite the problems in the dairy market, Mr Moloney told the meeting that Glanbia expected to achieve "a satisfactory full year trading performance". The company achieved a 24 per cent increase, to €66.6 million, in pre-tax profits last year.

The group's US business continued to perform well, said Mr Moloney, while it had made progress in addressing loss-making operations, including the recent decision to close its cooked meats facilities in Britain with the loss of 700 jobs.

He listed a number of challenges facing the company this year, including the fact that US cheese prices were "in freefall", and the company's pig plant in Roosky, Co Roscommon had recently been destroyed by fire. The plant was fully insured and capacity had been restored through outsourcing and an extension of operations at its Edenderry, Co Offaly and Roscrea, Co Tipperary plants, he said.

Asked later about the long-term future of the Roosky plant, he told The Irish Times the company was currently evaluating the best way forward in terms of what should be rebuilt or restored. The intention was to resume production but he could not be specific until the evaluation process had been carried out.

One shareholder, Mr Michael Flynn from Carrick-on-Suir, asked how the company could justify a 45 per cent increase in remuneration for directors, which was well in excess of the company's profits, when there had been a big decline in farmers' incomes. "The fat cats are getting fatter and the thin ones are getting thinner," he said.

Company chairman, Mr Tom Corcoran, said there had been a big increase in the directors' workload since the board was reduced in size from 24 members to 14 in 2000. The take-home pay of directors was actually "very small", he said.