Huge dairy revamp urged

By Des Maguire and Paul Mooney

Major controversies are likely to erupt following the official publication later this month of the new strategic development plan for the Irish dairy industry, commissioned by the Government and the industry.

A meeting of the consultative group set up to monitor the report

Rainsford Hendy, Timolin, Co. Kildare releases his shed born lambs to grass at Inchaquire, Ballytore, Co. Kildare. The latest ewe premium application figures show that the ten year exodus from sheep has turned the corner.

is due to be held in Dublin tomorrow (Friday) Efforts will be made at this meeting to sign off the 168 page report, a copy of which has come into the Journal's possession.

* The West of Ireland seems to be completely written out of the plan from a major dairy processing perspective. By omission, the West of Ireland is not favoured by the consultants as a location for one of only four designated plants to manufacture, butter, powders or casein.

They recommend that two of these plants should be in Munster, one in Leinster and one in "the northern half of the country."

* The plan calls for dairy farmers and processors to get bigger to survive. It says that the quota system needs to be changed to enable the average annual quota size to move from 40,400 gallons to over 107,000 gallons.

Within the quota system this implies a base of 10,000 to 11,000 dairy farmers.

The movement of milk out of less favoured areas to more economically efficient production areas is advocated by the consultants.

* At processing level the plan says that the Irish dairy industry is starting to fall behind its competitors and risks serious erosion.

It calls for a merger of three of the top five processors - i.e. Kerry, Glanbia and Dairygold to create a single consolidated player processing in excess of 70 per cent of the milk by 2008 and capable of competing on a similar scale to Dutch, Danish and New Zealand competitors.

* And it calls for a review of the role of the Irish Dairy Board within two years. The consultants say that the Irish Dairy Board and individual processors are competing against each other in many export markets, putting Ireland at a disadvantage to its main competitors.

* The consultants claim that if their recommendations are adopted, an extra €250 million a year in revenue is achievable. The net benefit to the industry, after the costs of achieving change in the product mix are estimated at €55 million p/a.

* Some of the key fast growing market opportunities for Ireland include dairy ingredients such as protein fractionates, customer solutions for food service and industrial ingredients, functional and health foods and the production of a wide range of base, ingredient and some branded products into affluent European markets.

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