Mr. John O'Gorman:

I agree with the Senator. Fixed milk price contracts in their current form are not a good idea from what we have learned, certainly over the past six months or so. The Senator has correctly highlighted that if a farmer fixes in above a certain percentage of income, that is, the milk price, a corresponding element of costs must be locked in as well. That is if they have a future and farmers demand them. We should remember it has not been co-operatives forcing them on farmers but the farmers who came to co-operatives seeking an income volatility tool. This is what we were able to provide.

If they are to have a future, a margin protection system needs to be built into it. I am not a financial expert.