Agri-merchants and co-ops continue to be concerned about the “closed loop” rule for cattle farmers who join the Glanbia/Kepak Twenty 20 Club. It requires participants to purchase all feeds, seeds, chemicals, fertiliser and non-prescription medicines from Glanbia Ireland.
John Grennan, managing director of J Grennan and Sons based in Rath, Co Offaly, says that most farmers are not fully aware of the ramifications.
“Farmers who are considering entering the Twenty 20 Club will be handing over their entire purchasing decisions to Glanbia which will then have a monopoly over supply of their inputs.
It is very difficult to believe that any bonuses in the scheme would compensate for higher costs
“No competition usually means higher prices, so the closed loop could lead to a significant increase in production costs for farmers,” he said. “It is very difficult to believe that any bonuses in the scheme would compensate for higher costs.”
“I believe this will not just affect farmers who sign up to it but all farmers as it will initiate the acceptance of marketing and purchasing structures that have major power imbalances.”
He believes that Glanbia’s ultimate goal is to put a similar closed loop around the 420,000 cows supplying it with milk. That would increase Glanbia’s profits but could put competitor suppliers out of business.
“Glanbia is suggesting we need more regulation. But it’s one which puts farmers at a major disadvantage. Ireland already meets the highest standards in the world in terms of traceability and quality assurance.”
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Agri-merchants and co-ops continue to be concerned about the “closed loop” rule for cattle farmers who join the Glanbia/Kepak Twenty 20 Club. It requires participants to purchase all feeds, seeds, chemicals, fertiliser and non-prescription medicines from Glanbia Ireland.
John Grennan, managing director of J Grennan and Sons based in Rath, Co Offaly, says that most farmers are not fully aware of the ramifications.
“Farmers who are considering entering the Twenty 20 Club will be handing over their entire purchasing decisions to Glanbia which will then have a monopoly over supply of their inputs.
It is very difficult to believe that any bonuses in the scheme would compensate for higher costs
“No competition usually means higher prices, so the closed loop could lead to a significant increase in production costs for farmers,” he said. “It is very difficult to believe that any bonuses in the scheme would compensate for higher costs.”
“I believe this will not just affect farmers who sign up to it but all farmers as it will initiate the acceptance of marketing and purchasing structures that have major power imbalances.”
He believes that Glanbia’s ultimate goal is to put a similar closed loop around the 420,000 cows supplying it with milk. That would increase Glanbia’s profits but could put competitor suppliers out of business.
“Glanbia is suggesting we need more regulation. But it’s one which puts farmers at a major disadvantage. Ireland already meets the highest standards in the world in terms of traceability and quality assurance.”
Read more
Over 610 new entrants to dairying
New Virginia dryer not for now - Glanbia
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