Paul Daly (Fianna Fail)
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I welcome the representatives from Ornua. This is not a topic in which I am as well versed as some of my colleagues, and that is why I sat back with interest to see how the thing evolved and developed. To be honest, I am little wiser and in no way reassured. I would hate to be in the shoes of the farmers mentioned by Deputies Fitzmaurice and Kehoe if they are watching the proceedings today. I accept the matter has been raised but there is no point raising an issue if we cannot come to some kind of a solution or a “get out of jail” for these people, who, as noted, are serious hardship cases at this stage.

I get Mr. Jordan’s point that Ornua does not deal directly with the farmers; it is dealing with the co-ops, which deal with the farmers. Farmers are price takers and have been in every sector, not just milk, unfortunately. If this was any other product or any other industry that we were talking about today, the person who was at the base of the system, where the farmer is in this situation, would know his cost price, would name his price, would include his margin and could not sell for any less, and then everybody who handled that product or processed it, or retailers along the way, would be adding on what they thought they needed to be their margin. Unfortunately, as I said, farmers across all sectors are price takers, not price makers.

Where is the price fixed? In this model, from what I have heard today, it seems that Ornua is working back down along. If it is doing a fixed-price contract with the co-op, the co-op is then going back to the farmer and cannot give him or her any more than the margin the co-op needs on what Ornua has fixed with it. Mr. Jordan said that Ornua is in a fixed-price contract with one of its biggest customers, so it is starting from there. Who is the price maker in this whole cycle, from the 50-cow farmer in Kerry who was mentioned, to the customer that Mr. Jordan is talking about and which Ornua is in a fixed-price contract with for its powder or product, which is going to the retail shelf? Somebody somewhere along that line determines the price and then everybody else is a cut below that.

Unfortunately, as I said, because it is farming, it is going in reverse. If it was any other product, the farmer would decide his price and then everyone else could put what they liked on it up along.