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EU scheme could pay Northern Ireland farmers to rein in their milk production

By Rachel Martin

Published 09/09/2016

Cattle on a farm in Northern Ireland
Cattle on a farm in Northern Ireland

Dairy farmers in Northern Ireland could be paid to produce less milk under a new EU scheme.

But the chairman of national body Dairy UK said that he was sceptical of the plans.

Under a new EU scheme, farmers will be compensated if they reduce their milk production in any one of four separate three-month periods between October 2016 and March 2017 in a bid to reduce milk surplus within European countries.

The €150m (£126.8m) EU aid project aims to incentivise farmers to voluntarily reduce their milk deliveries. The EU hopes that the initiative will reduce milk deliveries by just over one million tonnes, compared with the same period last year.

The Milk Production Reduction Aid is part of a €500m (£423m) aid package agreed at the Agri-Fish Council in July.

The scheme is expected to start on September 11, when the legislation comes into effect.

Former Dale Farm boss and Dairy UK chairman David Dobbin said: "Anything which will give support to farmers after a difficult year is welcome.

"Many farmers are still looking to grow. We want modest growth without growing too hard and causing a surplus.

"Some farmers who are already reducing their numbers will see it as an opportunity to retire or cut back further.

"But it's unsustainable and I can't see how it will work in the long-term."

Agriculture Minister Michelle McIlveen added: "The dairy sector in Northern Ireland has been experiencing a prolonged period of severely depressed prices and our local farmers have been particularly affected.

"I am pleased that our dairy farmers can now apply for EU aid to support a reduction in their milk deliveries to processors should they choose to do so.

"I would encourage dairy farmers to consider the detail of the scheme rules carefully and to ensure that they have the necessary supporting documentation readily to hand, should they decide to submit an application."

In March, farmers here received on average of just over 18p a litre. The price of milk has long been a bone of contention, with many dairy farmers arguing they are being paid unfairly.

Many have described the current situation as a "crisis" and have said they are being paid below the cost of production.

But processors have said oversupply means they are unable to offer more money for what has become a global commodity.

Milk prices have been falling since the first quarter of 2014. In just over two years the price has almost dropped by half.

However, while prices remain low, they have recently started to stabilise.

In January 2014, the price paid to farmers for each litre was on average 34p in Northern Ireland, compared to 18p in March.

In May, Northern Ireland's largest milk processor, Lakeland Dairies, offered farmers the chance to lock in a proportion of their milk at a set price.

Meanwhile, other dairies here have found ways of making use of surplus milk.

United Dairy Farmers, for example, has upped marketing of its Fivemiletown and Dromona cheese ranges.

Belfast Telegraph

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