Coveney: Intervention price needs to be raised to 25c/l
Minister for Agriculture Simon Coveney has said there is no link between the removal of EU dairy quotas in April this year and the global fall in dairy prices.

Speaking on RTÉ Radio 1’s Today with Sean O’Rourke programme on Friday morning, Coveney clarified that the current crisis in dairy markets is linked to geopolitical events such as the Russian ban on EU food products and the over-purchasing of dairy products in China in recent years.

He said for the media to link the removal of quotas to the current crisis is not a fair reflection of the work that had gone into preparing for the end of the quota era.

“It was predicted by many analysts that 2015 would be a bad year for price volatility,” he said. “This is due to a number of factors not related to the lifting of milk quotas such as the Russian ban on food products and the over-purchasing of milk products in China. [China] has a lot of milk in store so the demand is just not there at the moment.”

He added that price volatility is not new. “In 2009, the price fell to 21c/l. Then for the last three years we have had strong prices where supply was not meeting demand and farmers were getting as high as 40c/l. These low prices are not the norm for dairy farmers and they will improve.”

Call for raise in intervention price

Coveney will be meeting with EU Commissioner for Agriculture Phil Hogan in Brussels on Thursday 27 August to discuss the tools the European Commission can use to help dairy farmers through this difficult period. The tools range from an increase in the intervention price, which the minister says he will again ask Hogan to consider, to increasing supports for aid to private storage. The intervention price is currently the equivalent of around 21c/l and Coveney said he would like to see the price increased to 25c/l at the very least.

Export refunds, where dairy product is sold cheaply on the market and the EU makes up the difference, will also be up for discussion but Coveney added this is the least likely of all the options to be implemented.

These tools will also be discussed at the emergency meeting of EU agricultural ministers in Brussels on 7 September.

The minister said he has also asked Irish banks to be flexible with dairy farmers who have taken out loans in order to expand.

“I want to say to farmers at this time that I know this is a difficult time but it’s temporary. It will be resolved in time and there is growing demand for dairy products across the globe.”

Referring to the positive mood in Ireland around the time of the removal of quotas back in April, Coveney said farmers were right to celebrate it, as the future for the dairy industry is very bright.

“There has been a 10% increase in milk output since the lifting of quotas so the future is very bright for the dairy industry in Ireland,” he said.

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Listen: gap between large and small food exporters in Brexit readiness
Bord Bia's Brexit Barometer shows that agri-food companies have made progress in planning for the UK's exit from the EU, but work remains to be done especially for smaller ones.

As the prospect of a hard Brexit grows, results from a survey of 117 agri-food exporting companies by Bord Bia show that 54% have made some progress and developed plans in the past year, while 20% describe themselves as having made more advanced progress and taken actions and 26% say they have made no progress.

While Bord Bia's chief executive Tara McCarthy told the Irish Farmers Journal it was "great to hear" that three quarters of companies had made at least some progress, the detail of risks addressed by exporters shows larger ones are more advanced.

"For smaller companies, this is a bigger challenge. Larger companies are probably more organised, those over the €100m mark. The smaller companies, specifically those under the €1m mark, don't actually have the resources in many instances to put these scenario plans in place," she said.

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This was apparent in a replies to a number of survey questions on crucial business areas to be affected by Brexit. Asked whether they had modelled the cost of future customs requirements, 40% of companies with a turnover of €100m or more said yes, but this fell sharply to under 20% for those under €1m.

Some 85% of exporters have looked at expanding into new markets outside the UK.

"We're looking at a fairly positive story here," said McCarthy. But again, this applies to 100% of larger companies, with lower rates of market diversification among smaller ones.

McCarthy said it was reassuring to see more companies now addressing the financial aspects of Brexit, such as the need to increase cashflow availability to deal with export VAT when exporting to the UK after it leaves the EU. Exporters have also gotten better at raising Brexit issues in relations with their British customers.

However, "more needs to be done in the area of customs and tariffs, and the nitty gritty of supply chains," she said. In response, Bord Bia aims to boost its training offer on issues such as currency and supply chain management in the coming months.

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New ICOS president announced
Michael Spellman has been elected president of the Irish Co-operative Organisation Society (ICOS), following a meeting of the board today.

Spellman is currently chair of the ICOS National Marts Committee and is a former president of the European Association of Livestock Markets (EALM) and a former chair of Roscommon Leader Partnership. From Kilteevan, Co Roscommon, he is a board member of ICOS and of Roscommon Co-operative Livestock Mart.

'Vibrant agri-food sector'

The newly elected president said: “We have an extraordinarily vibrant agri-food sector and farmer-owned and controlled co-operatives play a huge role in underpinning, supporting and driving it."

"Notwithstanding the enormous potential which our industry has, and the ambition we have to grow our exports in line with Food Wise 2025, we face enormous challenges around CAP funding, volatility and compliance with our environmental commitments,” continued Spellman.

Spellman thanked the board for their confidence in him and for their support. He intends to work closely with the executive team and the expert committees, representing dairies, marts and all other co-ops and with ICOS members.

At the same meeting,James O'Donnell was elected vice president. James represents the National Co-operative Farm Relief Services and is a dairy farmer in Golden, Co Tipperary, supplying Dairygold Co-op.

ICOS represents over 130 co-operatives in Ireland, including the Irish dairy processing co-operatives and livestock marts. It's associated businesses have a combined turnover in the region of €14bn, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas.

Spellman will take office immediately. He succeeds Martin Keane who was president of ICOS from 2014 until earlier this month when he stepped down following his appointment as chair of Glanbia Co-operative and Glanbia plc.

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