Pat Deering (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I also welcome the witnesses and I agree with everything they said.

As someone who has been a liquid milk producer in County Carlow for many years, I can confirm that everything they said is 100% true, unfortunately. There is no doubt that the liquid milk sector is on its knees at the moment, for all the obvious reasons that have been specified.

It is ironic that we are having this discussion two or three days after Glanbia turned the sod on one of the biggest developments in Ireland for many years. One of the witnesses suggested there is a great deal of excitement about the future of milk production. That is true from one perspective but there is also a great deal of unease about it. Harvest 2020 is coming and there is excitement about that. If things keep going as they are, with regard to the potential for milk production, a number of dairy farmers will be eliminated. There are 1,800 or 1,900 such farmers in this country at present. The ways things are going at the moment, I predict that number will have decreased to 1,000 by 2020.

This committee has had discussions with the large multiples in recent weeks. It has already been mentioned today that milk has been used as a loss leader by most of these multiples for a number of years. When they have been questioned on the matter by members at this forum, they have strenuously denied that they put any pressure on primary producers. They have said time and again that under no circumstances would they pressurise such producers. I would like to hear the producers' opinions on the big issues regarding the multiples. Do they agree that most suppliers feel that practices such as loss leading and discounting are putting them under pressure?

The witnesses will appreciate that dairy farmers come under constant pressure to try to improve quality. New tests are invented on a regular basis. While it is important for milk quality to improve constantly, no extra payments are received when that happens. I would like to hear the producers' views in that regard. I accept that improvements in milk quality are important, but they are not being paid for.

We have been talking about the code of practice for some time at this forum. I would like to hear what the witnesses think of the argument made by the large multiples, which is that the substantial extra cost to them would be passed on to producers. Do they agree than an extra cost would be involved if an independent arbitrator were employed to oversee the practices of the multiples? These companies have argued that they have structures in place to ensure their practices are fully efficient and work well. They have suggested that these changes would cost a great deal of money. I would like to hear the producers' opinions on where that cost would be. Would an extra cost be involved?

The witnesses mentioned that an independent arbitrator has been in place in England since 1 January last. Have they received any feedback on how the new system is progressing in that jurisdiction? Do they think a similar approach could be adopted over here? There has been a great deal of discussion on the respective merits of voluntary and statutory codes of practice. It has been argued that a voluntary system would represent the best way of making progress. How do the producers view the matter? I think a statutory system would be better. Others would argue that the existing EU legislation should be strong enough to encompass all of this. What is the view of the witnesses in this regard?

Deputy Ó Cuív mentioned one of the most damning statistics set out in the documentation we have received. I refer to the table on page 18 which shows that the retail price of milk increased from 77 cent per litre to 111 cent per litre between 1995 and 2011, but the price received by the producer decreased from 32.8 cent to 35.5 cent over the same period. I think it sums up the problems we face. The figures do not match up. Something has to be done about it.