Simon Coveney hails ‘exciting’ end to milk quotas

The ending of the milk quota regime next March will be the most important and exciting development to hit rural Ireland in a generation, the Minister for Agriculture has said.

Simon Coveney was speaking to more than 400 farmers and dairy industry figures as he opened the National Dairy Conference in Dublin yesterday. "As far as I'm concerned, this is the most important and exciting development for rural Ireland that we've seen in a generation . . ." he said.

“This is one of the most significant opportunities for the Irish economy that we’ve seen in many years, in the most important indigenous industry for our economy.”

Mr Coveney said the dairy sector had been operating in a straitjacket since the EU introduced milk quotas in 1984. The post-quota scenario would be “extraordinarily exciting” for farmers who planned and managed the transition in a responsible and smart way.

“We are effectively moving from producing 5.5 billion litres of milk a year to over 8 billion litres of milk [a year] in the space of five years . . . [with] about 300,000 extra milking cows on family farms across the country.”

Mr Coveney said at least 3,000 more people would be needed to work on these dairy farms. “We will be looking at a yield increase of somewhere between 15 and 20 per cent across our herd as well.”

Expansion plans

Teagasc’s director Prof

Gerry Boyle

said the most recent survey by his organisation found that about 60 per cent of dairy farmers were planning to expand production in the two years following the abolition of quotas.

Some 1,000 dry stock and tillage farmers were expected to convert to dairy and a smaller number again were likely to re-enter milk production.

Mr Coveney also acknowledged the high level of greenhouse gas emissions coming from agriculture, but said: “ I will not allow a situation where the potential for growth and expansion in agri- food will be compromised by the setting of emissions limits, but that does not mean that we don’t have a responsibility to be the most efficient producer of dairy products and milk on the planet when it comes to sustainability.”

Lakeland Dairies chief executive Michael Hanley said his main concern was meeting growing demand. "There's a lot of optimism, I think well-founded optimism. Our only fear is that we won't have enough milk to satisfy the demand ."

Global demand

This growth in global demand was described as relentless by Bord Bia chief executive

Aidan Cotter

. He said 1.5 billion people would have joined the middle classes by 2025, which would push the demand for dairy products in countries such as Asia and

Africa

.

Rabobank Europe's senior dairy analyst Kevin Bellamy said the atmosphere in the dairy sector was "like the night before Christmas" as farmers looked forward to a life without quotas. "The expectation is high."

However he, and others, have warned that farmers would face price volatility because the sector was dependant on global export markets. Mr Bellamy said global factors such as weather or currency fluctuations could serious affect small farm incomes.