Models of co-operation to strengthen farmers’ position

Dairy cows at Greenmout Agricultural College. Picture: Cliff Donaldson
Dairy cows at Greenmout Agricultural College. Picture: Cliff Donaldson

On November 5, 2018, UFU Dairy Chairman William Irvine will be representing Northern Ireland dairy producers at a public hearing which will address “Models of Co-operation to Strengthen the farmer’s Position in the Food Chain” in the European Parliament in Brussels.

Crucially, in the context of Brexit, this hearing will provide the UFU with a unique opportunity to highlight the fact that, come what may, the Northern Ireland dairy co-operative structure will allow Northern Ireland to tackle every difficulty and opportunity that awaits our sector.

The message will be that despite the uncertainty surrounding our exit, on the island of Ireland, we have a dairy co-operative structure, which operates and fully functions on a cross border basis, meaning that we are prepared for whatever outcome pans out over the next number of weeks/months/years ahead.

Northern Ireland has a very effective dairy co-operative structure, with Dale Farm leading the way representing 30% of the NI milk pool and now accounting for 1,300 dairy farmers across the UK, which in itself is a reflection of its continuing success and growth. The Dale Farm governance structure and producer boards have ensured that the company has incorporated the views of the very members upon whom they rely.

This position of strength is illustrated by the recently agreed merger between Lakeland and LacPatrick, creating a cross border milk pool of 1.8 billion litres and 3,200 farmers, creating the second largest dairy co-op on the island. However, what sets the new co-op apart from Glanbia (the largest) is that this new entity will be truly cross border, significant considering the on-going issues surrounding Brexit and the land border between Republic of Ireland and Northern Ireland.

The new co-op will be known as Lakeland Dairies and will be overseen by a transitional board of 15 Lakeland representatives and eight from LacPatrick. The interim board will select a chair and subsequently a vice chair from each company. Longer term structures will be considered by a governance sub committee and it is likely that one-third of board directors will be from Northern Ireland. Again illustration of the Co-operative structure underpinning the local dairy industry.

The new co-op, as well as encapsulating the many established Lakeland brands manufactured at their Newtownards plant, the new entity incorporates the “Champion” and Ballyrashane butter brands. However, there is also the access to the infant formula market (LacPatrick’s link with Abbots accounts for 150,000 tonnes of product per annum) as well as the LP Powder brand, which is very popular in North Africa.

In summary, post Deregulation, the Northern Ireland Dairy Co-op structure has functioned very effectively, to the benefit to both farmer and processors. Milk will need to continue to cross the border to meet seasonal demand. However, crucially, this milk flow will meet demand from new markets, which will emerge on the back of the increasing economies of scale and competitive edge created by this new enhanced cross-border dairy co-operative.