‘NI dairy farms subsidising milk production’

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DUP MEP Diane Dodds has highlighted the challenges facing the dairy sector in Northern Ireland as a result of a combination of factors that has led to a reduction in farm gate prices.

Commenting after the vote this week in the Agriculture Committee on the Dairy Package, DUP MEP Diane Dodds said that while she welcomed the fact that the dairy package received the backing of the Committee, she feels this provision is only a step in the right direction, and lacks any real practical positives for farmers on the ground at this time in Northern Ireland.

She added: “We are facing a crisis in the dairy sector given the sustained drop in farm-gate prices for milk over the past twelve months. Recent figures released by DARD indicate that milk price has seen a reduction of 10.99ppl between April 2014 - when the milk price was at 32.94ppl - and April of this year, when the figure sat at 21.95ppl (including bonus payments). This represents a 34% fall. Despite the fact that milk prices have fallen, production has actually risen by 2% in the same period.

“With the average cost of production in the region of 26-27ppl, it is clear to see that farmers are producing milk well below the cost of production. From talking to farmers and processors there is a feeling that some farmers are producing more litres to ensure they can pay the bills. Unfortunately for many this is making the situation worse.

“Over the coming months it is imperative that the banks allow flexibility to get through this difficult time. Given that volatility seems to be the norm over the past number of years, the suggestion by the Commissioner that we should look at the more flexible always of financing loans to farmers is worth further examination. This may include for instance payback agreements which are linked to the milk price or cost of production.

“The dairy package contains some welcome long-term objectives which must be delivered on, however as I have said before, we need immediate action from the Commission to deal with the here and now.

“An increase in intervention prices has the potential to lessen the amount farmers are currently losing, but it would also put a more realistic bottom in the market. It would then send a signal to buyers that the market has bottomed out, reducing the amount of surplus product available.”