Minister for Agriculture, Food and the Marine, Michael Creed, one of the founding members of the dairy forum, hosted his first meeting of the forum with key stakeholders from the Irish dairy sector on Tuesday, 21 June.

The continuation of the forum is a commitment in the current Programme for Government given the need for a coherent approach to the issues facing the dairy sector, including current market volatility.

On Tuesday the forum discussed ongoing challenges in the sector with an emphasis on current market developments and the response currently under consideration at EU level.

The minister hinted at a range of measures to tackle volatility in the future, including fixed price and margin contracts, futures markets and access to increasingly flexible forms of credits, saying these "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," the minister said.

Access to finance

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, according to the Department.

The minister has recently met with the CEO's of both Bank of Ireland and AIB.

He 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.”

Creed will also be meeting Gerry Mallon, CEO of Ulster Bank, on Wednesday 29 June, to discuss the bank's sale of €100m worth of distressed agricultural loans to third parties.

Cashflow tool

Finally, before today’s forum, the minister launched a collaborative response from the dairy forum stakeholders to farmers' difficulties in planning cash flow projections in the short to medium term. This takes the form of a booklet delivered by the Department of Agriculture, Teagasc, the banks and the processors to help farmers better plan their on-farm cashflow.

Both the Department and the minister for agriculture need to address cashflow pressures on farms with provision for state aid through low interest loans or loan guarantees

The booklet, entitled ‘Cash Flow & Financial Management on Dairy Farms’, will issue to all dairy farmers shortly from their co-op with their monthly milk cheque.

This programme will run in conjunction with the existing Teagasc ‘Get Farm Financially Fit’ engagement.

IFA comment

Commenting on the meeting, Sean O'Leary, chairman of the IFA dairy committee, said that while fixed price and margin contracts are good long-term solutions, in the short-term the Department needs to focus on working with the banks to iron out any cashflow issues farmers might have in the coming months.

"The priority is getting cashflow to farmers," he said. "Both the Department and the minister for agriculture need to address cashflow pressures on farms with provision for state aid through low interest loans or loan guarantees."

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