Mr. Vivian Buttimer:

I am a liquid milk producer in west Cork. The other members of my team include Mr. Richard Helen and Mr. Donal Kelleher, who are also liquid milk producers, and Mr. Ciaran Dolan, who is an agribusiness consultant. I thank the Chairman and members for the opportunity to put our case and describe the growing difficulties we are experiencing as liquid milk producers. We are aware of the format and scope of this hearing and are strongly of the view that the concerns and problems of the liquid milk sector, while distinct, are also part of the overall issues being considered by the committee.

The price received by liquid milk producers, relative to the increasing cost of production and, in particular, the cost of winter milk production, is such that the 1,800 liquid milk producers have no, or very little, income. The returns from the marketplace are grossly inadequate given the amount of investment, labour and management inputs into our farms. We are seriously concerned at the growing power and dominance of the multiple retailers and the ever-increasing share of the final price they have captured. The continued downward pressure on price and the pressure they exert on milk processors which determines the price they pay to farmers threatens the very viability of the liquid milk sector. We believe that the current situation is unsustainable and if it is not rectified, it will leave producers with no other option other than to reduce or cease winter milk production.

The format of our presentation will focus mainly on two aspects, namely, a description of the current price-cost squeeze on long-term trends and we will put forward a number of proposals to strengthen the bargaining power of the dairy farmer, in particular liquid milk producers.

We have read the report of the submissions to this committee by Mr. Paul Kelly of FDII and Mr. John Bryan, president of the IFA. We fully support the comments of Mr. Paul Kelly regarding the need for the urgent implementation of a statutory code of practice for the grocery sector which should also include a provision for an arbitrator-Ombudsman along the lines already operating in the UK. This undoubtedly would bring about an improvement in the situation and should eliminate or substantially reduce the number and the scope of unfair trading practices. However, it would be rather naive to expect that a statutory code of practice, even with an arbitrator for the food sector, would not, in itself, bring about a level of price increases which is required.

There is a pressing need to strengthen the negotiating position of liquid milk farmers. We will develop this point further as we feel it is an important aspect which the committee may wish to consider.