Oireachtas Joint and Select Committees

Wednesday, 22 June 2022

Joint Oireachtas Committee on Agriculture, Food and the Marine

Fixed-Milk Price Contracts: Discussion (Resumed)

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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The witnesses have heard a consensus from this side of the table towards Ornua. Farmers find themselves in a very exceptional situation. When they signed these contracts, none of them thought that costs would go where they went. There are farmers suffering severe financial hardship. We accept Ornua has put a package on the table. I also accept the witnesses' figure that only a third of the fixed milk price contracts come through Ornua. I was actually surprised at that, but I am not doubting their figure. I am surprised because no other entity has stuck up its hand to say it has significant fixed-price contracts. Obviously, there are almost 700 million litres with other co-ops, so that is an issue that needs to be investigated further.

Numerous farmers who are in this situation have been in contact with me. Since before we had representatives of the Irish Co-operative Organisation Society, ICOS, before the committee a number of weeks ago, I have had numerous farmers in contact with me who are in severe financial hardship with this. Many of the farmers who are in fixed-price contracts are also the ones who are heavily borrowed. Interest rates are rising now as well, which will put greater hardship on these farmers. When the witnesses go to their next board meeting, I ask them to have a look at the package they have offered to the co-ops and see if it could be improved. There could be an extra couple of cent per litre paid to those farmers who are under severe pressure. I ask that genuinely as a Member of the Oireachtas.

Obviously, we have no leverage over Ornua as a company. Its board will make this decision. However, I earnestly ask the witnesses to see whether more can be done. I fully accept that doing so will have an impact on the overall performance for 2022 but farmers are under great pressure and, if the shoulder is not put to the wheel for these farmers, some of them will go out of business or will suffer severe financial hardship for many years. That is in no one's interest. Co-ops are extending merchant credit for them and different things are being done but, while it can be deferred, all of that money still has to be paid back at the end of day. Farmers are producing milk and receiving significantly less than the cost of production for it. That will put them in a very bad situation for a great number of years, if they are able to survive. I plead with the witnesses to go back to the board. As they have said, Ornua is a farmer-owned organisation. Sometimes the farmers on the ground do not appreciate that because they do not have much individual contact with Ornua. However, it is owned by the dairy farmers. I ask the witnesses to go back, examine their figures and see whether more could be put into the pot. The farming organisations have a job to do in finding out where the other 700 million l are and in getting the companies involved to come up with a renewed offer to their farmers.