Members of the Joint Oireachtas Committee on Agriculture have suggested that questions will be put to Ornua on the quantity of dairy goods it forward sold in the marketplace when the processor co-op goes before the committee on fixed price milk contracts on Wednesday.
This, they said, would help determine the capacity the sector has to further raise the price paid on contracted milk supplies and ease the impact of rising input costs on dairy farmers in contract arrangements with their co-ops.
The sitting will come just over two months after the Irish Co-Operative Organisation Society (ICOS) went before the cross-party committee to address TDs and senators on the same issue.
Committee chair and former president of the Irish Creamery Milk Suppliers’ Association (ICMSA) Jackie Cahill told the Irish Farmers Journal that he believed this sitting had helped push co-ops towards their first price moves on contract prices.
“I would like to think the discussion we had got the ball rolling on the co-ops moving on prices over the past few weeks,” Cahill said in referencing co-ops’ price top-ups.
Sharing the burden
The committee chair went on to state that he had met with farmers locked into milk prices lagging behind those paid for non-contracted milk deliveries.
Cahill stated that the impression had been given that there had been pressure placed on many of these farmers by lenders to enter into such agreements, particularly younger farmers and those more heavily borrowed.
“We need to see a better sharing of the burden, not with the whole burden falling on the primary producer. Everyone has to share some pain,” he continued.
“Large numbers of the farmers locked into [fixed milk price] contracts will be left economically unviable should costs increase any further.
“I have met with a significant number of these farmers and a lot are heavily borrowed and were under pressure from financial institutions to enter into them,” Cahill said.
The Tipperary TD insisted that cost index clauses must be inserted in future supply agreements for the option to become attractive to farmers.
“You will never get anyone to sign these contracts unless serious clauses are put in. A lot of the contracts causing the issues for farmers are too simplistic and this needs to be addressed moving forward."