Tuesday 23^rd September 2014

A commercial need still exists to remove product from the supply chain – Bertie O’Leary

Strong statement needed from Europe to ‘put a floor on the market’

ICOS President, Bertie O’Leary has expressed his disappointment at the EU Commission’s decision to close the Private Storage Aid Scheme for Cheese, which was introduced only a number of weeks ago in the wake of the Russian Trade Embargo.

The Commission states that the scheme was closed due to the number of applications from countries not directly affected by the Russian ban, and that, as such, it did not represent an efficient use of EU funds.

Mr O’Leary said that while the Commission may have had concerns about the usage of the scheme, the fact that it was so strongly subscribed demonstrates the commercial need to remove product from the supply chain, at least for a number of months.

The removal of the Scheme, he added, now necessitates the redoubling of EU support efforts, perhaps in a more targeted way, such as the provision of specific export refunds.

“As we have said before, the current market difficulties are as a result of weak sentiment, and what is needed is a strong statement by Europe that it is prepared to put a floor on the market. Whether that floor is established by Export Refunds or Intervention purchasing at reasonable price levels can be debated, but the Commission cannot remove a vital market support at this time without putting in place a robust alternative”.

He went on to outline the additional measures which needed to be pursued to alleviate the current difficulties. “We need to work hard to ensure that we can access alternative markets for our product, whether by expediting current trade negotiations, or by focussing the newly increased promotion budget on European dairy products in developing markets.”

“We also need to continue to pursue solutions to our impending massive superlevy bill. While an agreement on a butterfat adjustment remains elusive, we should still work to achieve it, as well as ensuring that the funds generated from superlevy fines are used to support dairy farmers directly.”

*ICOS – the Irish Co-operative Organisation Society – represents co-operatives and organisations in Ireland – including the Irish dairy processing co-operatives and livestock marts – whose associated businesses have a combined turnover in the region of € 14 billion, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas.

Ends.