Pat O'Neill (Fine Gael) | Oireachtas source

I welcome Mr. Comer and his colleagues from the ICMSA. Many of the points I intended to raise have been made by colleagues. I am sitting here today as both a farmer and a politician, two professions in which one must be an optimist to survive. The farmer must hope the weather helps out and that he or she is able to make a profit at the end of the year. A politician must be hopeful of being re-elected at the next election. Mr. Comer suggested that one did not need to be a genius like Pythagoras to see there would be a global depression in regard to milk prices. Certainly, all the research that was done did predict a drop in prices this year and next. It seems, however, that the farm organisations, the banks and the advisory bodies did not do enough to curtail what is now an expansion, and it has put people into great difficulty.

It would be interesting to know what the actual investment has been in the dairy industry by farmers via on-farm investment. I suppose information on how much was borrowed is easily obtained from the banks, but that will not tell us about the money that was spent which had been saved over the years. The dairy sector is in crisis at present, but that also was the case six years ago when the price of milk was 18 cent per litre. We are a small player on the global stage and to achieve a price increase here requires some type of problem in other countries. When grain is cheap, for instance, America produces as much milk as it wants because it is done on a grain basis.

I have a hypothetical question for the delegates. In their view, should the abolition of quotas have been done gradually rather than having one drop? As Deputy Deering noted, we are almost ahead of the 2020 target at this stage. Do the witnesses agree that implementing the abolition on a gradual basis might have prevented some people from getting into the difficulties they are currently experiencing in terms of the investments and borrowing they made? We were basing our expectations on a price of 40 or 41 cent per litre. People thought there would be a golden egg forever but, as we have seen, it comes in cycles.

Has the ICMSA been in discussion with any of the retailers in this country on the question of prices? We saw what happened in Britain when Morrisons tried to play a public relations game by stating that if people wanted to pay more for British-produced milk, it would let them do it. That was cynical. Could something be achieved by way of a general meeting with all the retailers with a view to ensuring they no longer use milk as a loss leader?

On intervention, there is a view that if the intervention price is increased to 28 cent per litre, it might make the co-operatives lazy. If they have a floor price of whatever, they will not go out and look for new markets and seek to expand what they are selling. The argument is that if they are able to sell in at whatever price per tonne, which guarantees the farmer 28 cent per litre, that will be the base price forever and we will not see any increase.

It is argued that if intervention is raised to that level, it may make the co-operatives lazy in looking for new markets and trying to expand products.