The Irish Farmers' Association (IFA) has hit out at a milk supply scheme recently unveiled by Lakeland Dairies claiming that it will unduly penalise farmers.
As previously reported by Agriland, under the ‘Milk Supply Management Scheme’ suppliers will be paid a reduced milk price if they exceed a reference volume of supply in peak months of April, May and June.
Incentives will be introduced to encourage increased milk production in off-peak months.
The measures, which come into force in 2023, will impact Lakeland’s suppliers in the Republic of Ireland and Northern Ireland (NI).
The cooperative is currently collecting two billion litres of milk annually and is investing a further €10 million in extra processing capacity this year.
Lakeland chief executive, Michael Hanley told Agriland that they are confident of being able to handle extra milk from suppliers for 2022, 2023 and 2024.
Lakeland milk scheme
However, IFA Dairy Committee chair Stephen Arthur said it was "really disappointing" to see a scheme penalising farmers for producing milk at the most economically favourable time of the year.
The IFA is to seek further clarity on the workings of the scheme from Lakeland.
Arthur noted that milk produced from grazed grass is Irish farmers' competitive advantage and must be prioritised.
He said that the proposed Lakeland plan raises serious questions.
"First and foremost, why is there a need for this scheme to be launched at a time when milk supply is back in Ireland and globally? With spiralling input costs, this trend looks likely to continue for the foreseeable future."
Arthur questioned where the funds raised by the four-cent levy on peak supply would go.
“This is farmers’ money and they are entitled to know how it will be used,” he commented.
The IFA Dairy chair also highlight the impact on new entrants and farmers who have recently invested on-farm.
"This proposed scheme will unduly penalise any farmer who is expanding or anybody planning on entering dairy farming.
"At a time when the average age of dairy farmers is relatively high, penalising peak production sends a very negative message to any young person thinking of dairy farming," Arthur stated.
