The IFA is encouraging dairy farmers to weigh-up the pros and cons before entering into the supply reduction scheme. IFA dairy chair Sean O’Leary says co-ops need to take the scheme into consideration when setting autumn and winter milk prices.

Over the coming days, information sheets and application forms will be distributed to co-ops and O’Leary said: “While I urge co-ops to ensure their suppliers all have an opportunity to avail of the scheme, I would encourage interested farmers to be proactive in securing those documents.” Applications forms will be available from co-ops with an expected deadline of 15 September.

He added that farmers who apply to the first three-month period of the scheme will not necessarily have to reduce production for each month. Instead, the commitment to reduce supply applies to the total of the three months, provided they remain within the 50% limit. He advised that participating farmers “could produce as normal in October, say, and dry off early for November and December”.

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O’Leary is now encouraging co-ops to help farmers to decide to enter the scheme and “giving farmers as much visibility of this as early as possible”.

The European Commission’s deputy director general for agriculture and rural development, Joost Korte, said on Tuesday that farmers need to commit to a 1,500l reduction in supply in order to avail of the 14.4c/l payment, as part of the EU-wide dairy aid package.

He also announced that farmers who do not meet their own target would face penalties through a “staged reduction in aid”. Milk supply will be monitored through processors.

ICMSA calls for direct dairy payment

On the €11.1m in additional aid that is not tied to milk supply reduction, the president of the Irish Creamery Milk Suppliers Association, John Comer, said the aid package needs to operate in a simple fashion. He rejected the IFA’s suggestion that the funds should be used to introduce low-interest loans. He said this would only operate as a bank subsidy, adding that the involvement of the banks would be “astonishing and unacceptable”.

Instead, the ICMSA proposes the Government double the European aid with national funds to provide dairy farmers with a direct payment of €1,200 comparable to the BDGP payment to beef farmers and the new sheep payment.

While milk prices increased for July, Comer added that the sector must move towards getting prices back above production costs, something farmers have not seen in a while.

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Minimum 1,500l cut to avail of milk production reduction scheme

July milk supply 2.5% ahead of last year - CSO