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Agriculture Minister Michelle O’Neill has confirmed that the £5.1m aid package coming to Northern Ireland is for dairy farmers only.
The money is the NI share of the €36.1m allocated to the UK as part of a wider €500m aid package announced by the European Commission in mid-September.
The initial indications were that member states had maximum flexibility as to how they allocate the money. However, with the money funded by dairy superlevy payments, coming to NI on the back of 2014/15 milk production figures, and with other UK regions deciding to make payments to dairy farmers only, making payments to other sectors would have left NI out of step with others.
After some hastily arranged meetings with local farmer representatives towards the end of last week, Minister O’Neill announced last Friday that the aid was for dairy farmers only.
The full allocations across the regions were based on 2014/15 milk production figures. They work out at:
In England, the package averages £1,820 per dairy farm. In Scotland, their allocation is worth approximately £2,620 per dairy farm.
However, on a per-litre basis. NI actually gets slightly more than the other regions after the European Commission pointed out to Defra the greater pain felt here by dairy farmers due to our exposure to world commodity prices. For that reason, the UK received an extra €1.5m (£1.1m), all of which is coming to NI.
Minister O’Neill said: “I made a strong case for differentiated aid for the north given the drastic price reductions here compared with Britain and, as a result, I have secured a better deal for our farmers.”
In NI, the aid works out at 0.23p/l and will be based on 2014/15 production. When put across 2,655 dairy farms (2014 census results), it is an average of £1,921 per farm. A million-litre producer will receive £2,298. It is hoped that the money will be paid out within the next few weeks, although Defra in England has already said that the payment won’t come until December.
There are signs that the days of frequent and relatively easy switching of milk producers from one buyer to another in NI could soon be over. With the recent mergers, two buyers disappear from the scene, assuming that the deal between Fane Valley and Lakeland Dairies is finalised.
This means less competition for milk and the ending of the quota regime has put NI milk producers in a weaker position to negotiate with processors based south of the border, although winter milk is still an attraction. Anyone with a small herd or in an awkward location is already finding it difficult to obtain an alternative milk buyer.
Longer-term commitment is one of the aims of moves by Glanbia to get producers to sign milk supply agreements and purchase shares (see page 60).
Other co-ops based in the Republic of Ireland have also indicated that they are open to producers becoming shareholders or keen that this would happen. It could be a prudent move for the farmer.
Unfortunately, as dairy farms face unprecedented pressure on cashflow, the timing could hardly be worse.
No pressure
Northern milk suppliers to Aurivo Co-op are permitted to become shareholders at €1 per share, with a minimum holding of 1,000 shares (which can be bought over a period). According to chief executive Aaron Forde, around half of Aurivo’s suppliers in NI are shareholders. There is no pressure on anyone to become a member.
A significant number of northern suppliers to Town of Monaghan had shares in the co-op and will have shares in the new LacPatrick Co-op. Those who weren’t shareholders are being invited to become members of the new co-op.
The share register at Lakeland Dairies has been closed for a few years but it is expected that it will be open again by the end of 2015. It isn’t yet clear how Fane Valley’s shareholding in Lakeland is to be handled, although the intention is that the procurement of milk in NI will be by a jointly owned company.
SHARING OPTIONS: