AT the recent Semex conference in Glasgow, two central themes emerged from the issues being discussed. There was much focus on the shape of the industry post-quota, particularly the impact from potential growth in Ireland, and increased transparency of milk prices.
The focus of the post-quota discussion was on the potential threat faced by the GB industry by the growth of the Irish dairy industry. Catherine Lascurettes (executive secretary, National Dairy and Liquid Milk Committee, Irish Farmers Association) presented on the current situation in Ireland, the goals post-quota and the challenges Irish dairy farmers face.
While the strategy put forward in the Food Harvest 2020 report, included plans to increase milk production in Ireland by 50%, challenges facing the industry mean that a 25-30% increase is more realistic.
According to Ms Lascurettes, the challenges of available financial resources, access to credit, risk of superlevy (over the past 10 years the Irish have paid e55.5m), volatility of margins and milk prices and uncertainty associated with CAP reform will all affect the ability of the Irish dairy industry to reach the proposed target.
While there has been substantial investment in improved or increased processing capacity by several Irish companies, it has primarily been aimed at expanding markets in emerging countries, such as those in Asia and Africa, for products such as butter, cheese/whey and powders.
Peter Kendall, president of NFU, addressed questions regarding potential issues post-quota for the UK dairy industry. Mr Kendall recognised the Irish threat but highlighted that other Member States, such as France will aim to take advantage of the ability to increase production post-quota as well. He noted the importance of leadership and innovation for the UK industry, but ultimately believed the UK can be competitive.
Discussions regarding the transparency of milk prices concentrated on how this might be achieved. The EU perspective was put forward by Sieta Van Keimpema, vice president of the European Milk Board (EMB), who believed that legislation is needed to produce ‘fair’ prices. The EMB propose there is a monitoring board, which would measure and track the full cost of production to help ensure dairy farmers can run a viable business.
Domestically, it was questioned whether the Voluntary Code of Practise would bring the transparency that farmers are asking for, although it was emphasised that time would be needed to assess whether the voluntary route is working.