Minister Creed chairs his first meeting of Dairy Forum
Forum also sees launch of new initiative of cashflow tool for dairy farmers
The Minister for Agriculture, Food and the Marine, Michael Creed T.D., today hosted his first meeting of the Dairy Forum with key stakeholders from the Irish dairy sector. The continuation of the Forum is a commitment in the current Programme for Government given the need for a collaborative strategic approach to the issues facing the sector including current market volatility. The forum today discussed ongoing challenges in the sector with an emphasis on current market developments and the response currently under consideration at EU level.
Commenting on the meeting the Minister said “As one of the proposers of the establishment of this Forum in 2015, I was pleased to host today’s meeting to discuss the issues of current concern to all stakeholders. I am currently engaging intensively with Commissioner Hogan and Agriculture Ministers from other EU member States on the potential for further response to current market difficulties and today’s Forum was a key part helping to inform the Irish position in these discussions. The recent agreement of the Commissioner to raise the available volumes for intervention of SMP in response to my request is a concrete example of meaningful market support tools being deployed in response to this volatility”.
Before today’s Forum, the Minister also launched a new collaborative response from the Dairy Forum stakeholders to difficulties experienced by farmers in planning cash flow projections in the short to medium term. This takes the form of a booklet delivered by the Department of Agriculture, Food and the Marine, Teagasc, the banks and the processors to help farmers better plan their on-farm cashflow. Minister Creed commented, “This initiative from the Dairy Forum is timely and responds to the need identified by all stakeholders for cash flow and financial planning training for dairy farmers. It represents a very positive example of stakeholder collaboration. Equipping farmers with better financial planning skills is essential, and I would encourage all farmers to engage with this initiative”
Other measures at EU and national level include €26.4m in targeted direct aid payments to dairy farmers, and the advance payment of some €1.2billion in 2015 BPS payments. Similarly the introduction or continuation of various market support measures at EU level including the PSA schemes for SMP, cheese and butter as well as intervention for SMP have been of some assistance. Domestically, some processors have rolled-out of a number of fixed milk price schemes and flexible credit schemes which can also be of assistance.
The Minister continued: “While there has been volatility in dairy markets in recent times, it is important to remember that the medium term prospects for global dairy markets are good. How we mitigate the current volatility is the challenge. Volatility in dairy markets is a global problem, an EU problem and an Irish problem for which there is no single silver bullet. Fixed price and margin contracts, futures markets and access to increasingly flexible forms of credits are all part of the toolkit that will be required. The presentation from the processing sector today on their work to develop a collaborative price index for Ireland was well received and is a timely example of the kind of innovation required”.
Access to Finance was also discussed with an exchange of views with the main banks now a firm part of the agenda at each dairy forum. The Minister confirmed that this topic was also discussed when he chaired the Food Wise 2025 High Level Implementation Committee last week when representatives from the Strategic Banking Corporation of Ireland (SBCI) and the Irish Strategic Investment Fund (ISIF) attended. Discussions covered access to credit as well as the significant cost of credit for farmers and SMEs in Ireland, particularly when compared to other EU Member States. Minister Creed also indicated that he had recently met with the CEOs of AIB and Bank of Ireland.
Minister Creed commented, “One of my priorities under the Programme for Government will be to support the provision of lower cost and more flexible finance for the sector. I have now conveyed that message strongly to all of the banking institutions. When I met the bank CEO’s last week I also stressed the need for them to be flexible in the context of increased income volatility and to show forbearance where their dairy farmer clients experience difficulties”.
The Minister concluded “Our continued strong export performance in the sector points towards the long term fundamentals of the Irish dairy sector being sound. The priority has to be on the measures which can help producers ride out this current slump, as well as on measures which can minimise the effects of such downward volatility in the future. I will be raising dairy sector concerns at next week’s Council of Agriculture Ministers meeting in Luxembourg and the discussion at the forum today was an extremely useful first step in helping to inform the Irish position for this meeting”.