During the recent Committee of the Regions in Brussels, Alderman Arnold Hatch had the opportunity to question Commissioner Hogan on the challenges facing the dairy industry here in Northern Ireland and across Europe.
Speaking at the plenary session, the Ulster Unionist Party Alderman acknowledged that there was a global oversupply of milk stemming from the Russian embargo, economic slowdown in China, as well as decreasing oil returns in oil producing countries traditionally importing dairy products. It was noted that this crisis has taken more than £220 million out of NI’s economy this year.
Arnold Hatch said:
“Milk prices are below the cost of production. Some farmers have been losing up to £2000 a week due to the low prices being paid by the processors. There used to be an equal percentage share between farmers, processors and retailers-now the processors and retailers (mainly supermarkets) are taking ALL the profits. This must be investigated.
“Eighteen months ago local farmers were receiving over 30pence per litre, and many progressive young farmers made substantial investments. Now, many of these farmers are being forced out of business.
“Northern Ireland has been hit harder, and earlier than most EU Member States. Our market is heavily export-orientated - out of the 2.2 billion litres of milk produced last year, 85% was sold to external customers. The weak Euro exacerbates the problem further.
“Whilst the ECR group agree with the Common Agricultural Policy being guided by market-based principles, and that the abolition of milk quotas presented us with an opportunity to build a stronger dairy sector, it still was clear that the dairy industry is in clear need of support.
“In urging the EU institutions to help mitigate the effects of price volatility for farmers, I do note that the EU support package announced on 7th September was a step in the right direction but will not stabilise the market or address the cash-flow difficulties farmers now face in the short term. Time is short for those farmers facing bankruptcy.
“I have now urged the Commission to raise the intervention price and I challenged it what it believes the prospects are for the dairy industry in the short term- a fast-track solution which would raise the intervention price is needed quickly and volatility will have to be managed.
“I asked for a progress report on material changes and improvements to the Milk Market Observatory which aim to make it more robust and to provide more timely and accurate data and for some analysis of progress made in ongoing TTIP negotiations with the USA.”