Mr. John O'Gorman:

I think as an industry, dairy has its problems. There is no doubt about it. However, we are probably in a more fortunate position than the pig and poultry industries. I am aware that the committee discussed them earlier today. We have been very fortunate that the milk price thus far has managed to keep step with the inflation that is coming in in the production costs for those who are not in the fixed milk price contracts. I must stress that I am referring to those who are in the variable price contracts. The variable price has gone up somewhere in the region of 8 cent to 9 cent per litre. The costs of producing that milk are front-loaded, and the farmer will not receive the benefit for it for a period of time. According to a Teagasc survey released today, the costs in producing that milk have gone up by about 8 cent per litre. While the farmer on the variable milk price contract is receiving a much enhanced milk cheque at the end of every month, equally, he has a much higher cost of production to meet at the other end. As I have said, fortunately from a dairy industry point of view, the variable milk price guy, please God, will not be any worse off at the end of this very volatile period because milk markets have been so strong. We are fortunate that milk markets have been so strong in that regard. Some co-operatives have put together stability funds over a period of time. Indeed, there was an announcement yesterday that another co-operative is going to start putting together a stability fund here. That stability fund comes out of the milk price. For the vast majority of co-operatives, there is only one income stream, namely, the milk processing side of the business and the margin they make from whatever trade they do with their members, from an input point of view, on the feed, the fertiliser and so forth. I certainly would not have the mandate from my milk suppliers to bail out those who find themselves in trouble individually. It is something that I can bring back to my board and there can be discussion on it, but I certainly could not say that I have a mandate to do that at the moment.