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Co-ops have been accused of undermining farmers by paying a base milk price lower than the Ornua PPI and then using topup payments to close the gap.
The accusation comes from president of the Irish Creamery Milk Suppliers Association (ICMSA) Pat McCormack, who said they were "unhappy and suspicious" of the practice. He said farmers wanted to be paid a proper price for their milk and not have discretionary "hardship" or "loyalty" bonuses used “at the whim” of the processor to top up the base price.
Re-calibrating
“We do not accept the idea that re-calibrating a minimum base milk price and dividing it into elements that are market-derived and discretionary stands up to any scrutiny at all. This month's milk price announcements are a case in point.
“The Ornua PPI translated across to 32.1c/l and remember that this is the price already achieved, why then do we have milk processors announcing a base milk price below the PPI and then announcing a ‘bonus’, as if they were doing their suppliers a favour?”
He added suppliers did not like the impression created that they were standing in front of their co-op with their "caps in hand" and rather they wanted what they felt they were entitled to. This, he said, was at least the same price per litre that the processor was paid for the farmer’s products.
Insidious
“ICMSA is very conscious of the kind of financial vice-grip that thousands of farmers are in and we know that every cent counts.
"But we’re not fooled at all and we reject and resent this insidious practice of shorting farmers on their proper price and then announcing a topup discretionary payment that brings it up to what it should have been in the first place,” he concluded.
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