Jobs Dividend from End of Milk Quotas Highlighted at Dairy Conference
The impact of dairy farming on the recovery of the rural economy was highlighted at a conference held to mark the elimination of the EU milk quota system. The event organised by Teagasc and the Irish Cooperatives Organisation Society took place at the City West Hotel, County Dublin today, Wednesday 1 April, marked the launch of a new book which charts the history of the dairy sector in Ireland in the quota era and which also estimates the jobs dividend that the policy change will bring for Ireland.
This week dairy farmers around Ireland will milk dairy cows without the restriction of milk quotas for the first time in 31 years.
The Minister for Agriculture, Food and the Marine, Simon Coveney TD said: “This is the most fundamental change to Irish Agriculture in a generation. Since 1984, the industry has operated within a quota environment but now the shackles are off and the sector can start to realise its full potential. Removing quotas can be of huge benefit to farmers and the wider rural economy through direct and indirect job creation. We should be mindful of course that there will be challenges in the post quota world and in this regard I very much appreciate the important contribution that Teagasc and ICOS are making in assisting the development of this sector and in providing advice and support to farm families”
Teagasc Director, Professor Gerry Boyle said: “The removal of quotas is highly significant as it provides farmers with the freedom to choose whether or not to produce milk, or produce more milk through expanding their production. However he warned that expansion is not for all milk producers. “Some existing producers do not necessarily want to produce more milk while for others producing more milk is not a good option. In my view, we must clearly advise farmers that it is a case of ‘better before bigger’, efficiency before expansion, or ‘skill before scale’.”
For those among the country’s 18,000 dairy farmers who choose to expand, they will see the immediate economic benefit of milk quota removal. The additional people employed on farms to milk Ireland’s increasing dairy cow population will also benefit.
By increasing the volume of milk they produce these farmers will boost their incomes. But increased milk production has benefits for other sectors of the economy also.
Teagasc economist Trevor Donnellan said that for every additional job created in the dairy and allied sectors, a further job will be created in the wider economy.
Agri Input suppliers will see an upturn in their business as they service the needs of the expanding sector. The milk collection business will need to expand considerably to cope with the targeted 50 per cent increase in milk production and this will provide employment in the transport sector around the country. Manufacturing and distribution jobs will also be created in the dairy processing industry.
Construction jobs have already been created with several projects aimed at catering for the additional milk production already well advanced.
Allied to this will be the jobs created in upgrading the roadway and building infrastructure on expanding dairy farms and the installation of dairy equipment such as milking machines and bulk tank refrigerators.
All told 15,000 additional jobs could be created over the next five years.
The conference highlighted the regional impact of dairy expansion with a special focus on the economic benefit that will be derived by Cork’s 4,500 dairy farmers and the wider economy in the county.
Reflecting on the milk quota era Dr Thia Hennessy of Teagasc said that over the last decade it has become clear that the quota system has outlived its usefulness. The quota system helped to prop European milk prices significantly above world market levels for many years, but given the growing global demand for milk products and higher prices internationally the time is now right for quota removal. Ireland is one of the lowest cost producers of dairy products and this means we are well placed to compete on the global market, she added.
Two publications produced by Teagasc were circulated at the conference: