ICMSA warns against companies getting favourable leasing terms

“Last year saw a significant increase of 2.1 percent across the EU in milk production and it would seem that this increase is continuing into 2012 in certain Member States: Germany is recording a 2.3 per cent increase for the first 7 weeks and French production is also showing an increase. This will unfortunately impact on any likely increase or relaxation of quota before its abolition in April 2015”, said Mr McCormack, who is Chairman of the Dairy Committee as well as Deputy President of ICMSA.

“Last year saw a significant increase of 2.1 percent across the EU in milk production and it would seem that this increase is continuing into 2012 in certain Member States: Germany is recording a 2.3 per cent increase for the first 7 weeks and French production is also showing an increase. This will unfortunately impact on any likely increase or relaxation of quota before its abolition in April 2015”, said Mr McCormack, who is Chairman of the Dairy Committee as well as Deputy President of ICMSA.

“The public comment by Minister Coveney last week that there is insufficient support among other Member States to change the quota is very disappointing. As of now, the reality is that we are left with three full years of a rigid quota; apart form the already agreed 1 per cent increase in each of the next two quota years. So management of quota will be critical over the 3 years as most farmers will have increased capacity to produce more milk and as they make plans for the post quota era. ICMSA policy is to ensure that the quota rules are fair and that they are properly applied”, he said.

Mr McCormack said that ICMSA did not want to see a substantial increase in the cost of quotas as the pressure came on for extra quota and as the supply of quota on the market fell. “This will be a major policy issue – if not, the major policy issue - for the Department’s dairy policy and the wider sector generally for the next three years.

Mr McCormack said he welcomed the proposed change in relation to companies leasing quota on the grounds that while ICMSA wanted to accommodate certain to manage the quota of their own shareholders, the Association could not tolerate a situation where companies, in general, were free to lease quota but farmers operating as sole traders were prohibited from following suit. Mr McCormack said there was already evidence of abuse of the regulations in this area.

“Farmers must realise that the present quota system means that one person’s unfair gain is another man’s loss. It’s a huge paradox that as we towards the complete abolition of quota, the pressure on farmers with regards to quota and possible substantial superlevy fines has never been as pressing. In addition to clear rules and their transparent implementation, ICMSA are also pressing for improved information flows and earlier transmission of delivery data so that farmers can better match their supply with their quota. It surely should not be impossible for co-ops and the Department to have the same system of calculating deliveries throughout the year?” he asked.