300m Support For Dairy Farmers Not Enough

Posted by Alan Kelly on October 22, 2009 at 09:37 PM

Dairy Crisis
Dairy Crisis

Today I voted to increase the dairly support fund for EU dairy farmers from 300m to 600m. The parliament voted in favour of the 300m but alas did not agree to the doubling of this. This was despite the fact that the parliament had previoulst argued that such a figure was necessary. The Labour Party MEPs voted for the 600m but unfortunately the FG and FF MEPs voted against it, which I believe is unfortunate as it was in the best interests of Irish farmers.

The 300m is welcome but is merely a sticking plaster over a much wider problem. We have both farmers and processors seriously struggling to maintain a reasonable level of income or are even tittering close to bankruptcy. The proposed fund works out at approximately €600 per farmer in Ireland. If you are running close to bankruptcy, that is not a huge amount of money.

The milk crisis is something the Commission essentially made a pig's ear of. Only 18 months ago they were saying that milk prices would increase substantially only to see them fall by half in some countries. This is why I will be voting to give them power to intervene quicker in the market for milk prices. However their recommendation of €300 million is nowhere near enough. The European parliament voted last September that €600 million should be made available. The Labour group in the parliament wish to keep that figure in place and show dairy farmers some solidarity.

As a support mechanism to the dairy industry it is much more substantial and gives us a stronger negotiating hand when it comes to the allocation of the fund by European finance ministers. A more significant sum would also be of greater benefit to the wider economy. Given how bad things are for dairy farmers, they will use their money to pay bills for local services, like the vets, local hardware shops.

This is much more beneficial than bailing out the banks that hoard the money to protect themselves against future debt. The dairy market has become wildly distorted because the commission failed to recognise the problem or implement measures to control supply. The long-term potential for the Irish dairy industry is strong but now at risk. Milk production is likely to cease in many European regions and the Irish dairy industry will be in a position to fill that void.

However if we do not give them a realistic lifeline at the moment and give them proper support, then we run the risk of people leaving the land and losing one of the cornerstone of Ireland's rural economy.


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