Proposed milk levy is ‘taxation by the back door’ – McLoughlin

 

The President of ICOS – the umbrella body for all dairy processing co-operatives nationwide  – has criticised comments made by the Minister for Agriculture, Mr. Simon Coveney T.D., around the Minister’s proposed further milk levy on Irish dairy farmers. In his budget statements, the Minister has suggested a new levy on milk production which he says will be channelled towards the activities of a semi-State body, Bord Bia.

 

Opposing the Minister’s levy proposal, ICOS President Pat McLoughlin said:

 

“The Minister proposes that a new milk levy will go directly to Bord Bia.  He proposes that this will be ring fenced to promote the marketing of Irish dairy produce abroad. This duplication of marketing effort and unwarranted further levy on dairy farmers has been proposed at a whim and on a basis that the dairy industry is simply not aware of.

“It may be more the case that the Minister needs to cut operational budgets for the agencies under his remit.  To fill that gap he must find funds from every other source, and in this case he is intent on placing a new levy on milk production.”

 

“The Minister also made an astonishing comment, carried in media reports, that the Irish Dairy Board is a ‘private organisation that does not represent all dairy farmers’.  In saying that, he has somehow failed to note that the Irish Dairy Board is a co-operative enterprise owned by Irish dairy processing co-operatives and dairy companies and through them by Irish dairy farmers.”

 

“The farmer owned co-operative dairy industry produces 97% of the entire Irish milk pool and the majority of Irish exported consumer dairy product is sold through the Irish Dairy Board.  It is wholly inappropriate that the Minister for Agriculture should create any impression otherwise as he now promotes taxation by the back door in the form of a proposed new milk levy to fund a semi-State entity.”

 

“There is a strong need for the dairy industry to concentrate its collaborative efforts on the combined fronts of market and supply chain integration. It is also imperative that the dairy industry and its co-operative members demonstrate confidence and focus globally for the future. Irish dairy co-operatives were formed by Irish dairy farmers, they are governed by Irish dairy farmers, and their collective destiny and responsibilities needs to steered by Irish dairy farmers over the coming years. Having a Government minister intervene at this time to divert both co-operative member funds and efforts into a semi-State organisation undermines the credibility, cohesion and capability that the industry is trying to build on a global stage.”

 

“The Irish Dairy Board has an international dairy brand which is Kerrygold.  It markets, promotes, sells and distributes Irish dairy products on behalf of the majority of all Irish co-operative dairy processors and their member dairy farmers and is active in over 80 countries worldwide. Dairy farmers already support this channel to market with a levy that is paid through their co-operatives,” said McLoughlin.

 

“The Irish dairy industry does not need a duplication of generalised promotional expenses which the Minister is proposing.   The greater priority for the Irish dairy industry must be for monies levied from farmer members of Irish dairy processing co-operatives to be channeled towards projects which have specific commercial goals including market-led research, innovation and new product development.

 

“Years ago, when successive Irish governments were lobbying Europe seeking greater levels of Intervention, the Irish Dairy Board, working on behalf of Irish dairy co-operatives, went out and developed new markets. This is still the case today.

 

“ICOS has seen a resurgence of the strong desire by dairy farmers to control their own destiny, to re-invigorate the co-operative processing sector and to take leadership of the industry. This is witnessed in the high take-up of director training and leadership courses.  Creating duplication of marketing effort by the industry and funding this with a new levy does not form part of this perspective,” said McLoughlin.

 

ICOS is writing to the Minister seeking a meeting on these matters.

 

ICOS – the Irish Co-operative Organisation Society – represents 130 co-operative businesses and organisations in Ireland – including the dairy processing co-operatives and the co-operative livestock marts nationwide – with some 150,000 individual members, 12,000 employees in Ireland (a further 24,000 abroad) and combined turnover of €12 billion. Irish agricultural exports contribute over €7 billion to the Irish economy each year and the sector accounts for 8% of national employment.