Northern Ireland - Nicholson in talks over dairy sector
Published:September 8, 2006
Source :Farming Life
ULSTER Unionist MEP, Jim Nicholson, raised the problems facing the Northern Ireland diary industry at the European Parliament in Strasbourg this week.
Last week, Mr Nicholson met the Northern Ireland Agriculture Minister, David Cairns, where he raised with the Minister the serious financial difficulties facing the dairy sector in Northern Ireland, especially with the continuing fall in export refunds on dried milk powder and asked him to take personal charge of lobbying the Commission on this issue.
In anticipation of a deal being done at the World Trade Organisation, the European Commission openly admitted cutting export refunds with substantial cuts causing dairy farmers and processors to incur significant losses.
Speaking in Strasbourg Mr Nicholson told MEPs: "Over the summer period I was briefed by many of the dairy industry's leaders in Northern Ireland and was especially appalled to learn from them that because of the reduction in export restitution refunds the price being received by the Northern Ireland farmer was now at an all-time low.
"If this is not reversed farmers will simply go out of business as they will be unable to compete.''
He added: "Many things in Europe are always done far too late and I would urge the Commission to act now while there is still time to restructure the industry and save many jobs in Northern Ireland. I urge them to act now and act in time.''
Added-value liquid milk products have experienced high levels of growth over the past 12 months, according to TNS data.
The filtered milk category, which includes brands such as Cravendale and Tesco Pure, has experienced growth of 29 per cent over the past 12 months. This is equivalent to an extra 39 million litres of milk being sold in the year.
Modified milk, which included Flora pro-active, St Ivel Advance, and other milk with added omega 3, has also experienced high volume milk growth over the past 12 months.
An MDC Datum spokesman said: "Farmers benefit from increases sales of added-value milk if a) the product is sold by a farmer co-op; or b) if the product increases total sales of milk.
"In this second case, more sales mean more milk is bought by companies that pay farmers more for milk than commodity processors.
"However, if the added-value liquid milk simply replaces sales of normal liquid milk there is minimal benefit for farmers unless processors specifically pay more for the milk for that product.''
Commodity markets are, at present, performing better than expected due to good demand and tight supply pushing prices up.
The spokesman said: "Stronger commodity markets would be expected to lead to higher farmgate milk prices in typical circumstances.
"However, with a number of milk buyers announcing farmgate milk price cuts earlier in the summer, on the expectation of falling butterfat values and fixing prices until 2007, the better than expected returns will initially benefit milk buyers in the short term.
"How much benefit farmers will receive will depend on how long commodity markets remain firm and whether fixed price agreements can be renegotiated.''
