Mr. Richard Helen:

We feel we have no control over the price of essential feed products. In 2004 soya beans, the main source of protein for milk production, cost €280 per tonne, but that figure has risen to €550 per tonne this year. Our milk price fell in 2009 owing to the liquid milk price being matched with the manufacturing price. These prices were matched to allow processors to buy milk even more cheaply. The price we are now paid has increased slightly, but not by enough to cover our increased costs. In 2013 our price has increased by 1.25 cent per litre, despite the fact that Dr. Joe Patton from Teagasc showed that our costs for feed alone had increased by 4.5 cent per litre. Our price increase was funded by processors without any effect on retailers. Our share of the retail price in 1995 was 43%, but this has fallen to a new low of 31% in 2013. Operating a viable family business on these margins is not feasible and urgent change is needed.

There is broad agreement on the extent of the problem facing farmers generally and liquid milk producers in particular. The price-cost squeeze is not a uniquely Irish problem as dairy farmers in the United Kingdom are facing similar difficulties. The latest reports indicate that UK farmers are experiencing one of the most difficult periods ever as production costs have soared, while milk prices have risen insignificantly. The position of dairy farmers is similar in many northern EU member states. Recent analyses by dairy farmers within the European milk bowl state a farm gate price of 51.5 cent per litre is required. With the liquid milk price averaging a mere 32.5 cent per litre last year, farmers are losing close to 20% per litre when labour costs are factored in. We describe the problem of our fellow farmers in other member states in order to emphasise that this is an EU-wide problem requiring an EU solution or a national solution based on EU legislation.

The appointment of a groceries code adjudicator in the United Kingdom will, undoubtedly, improve the relationship between the major retailers and their direct suppliers. Specifically, the UK legislation does not allow for any form of price setting or consideration of what should be a fair price as far as farmers are concerned, contrary to what some commentators have stated. Therefore, any benefit to farmers will be indirect. Something in addition to the statutory code and an adjudicator is required. EU legislation has changed in recent times to allow farmers to come together, within limits, so as to strengthen their price negotiating position.