Milkbattle - Village Magazine

60 April 2015

worked together for decades, generating

the beneﬁts of economies of scale while

retaining ownership or strong interest

in the upstream sellers. Land prices are

strong, in part because of demand from

the dairy sector.

Many in the sector look to New Zea-

land, which now produces 18 billion

litres of milk annually. When quota came

in in 1984, like Ireland, they too pro-

duced 5 billion litres.

10,000 new jobs, and 300,000 new

cows, are projected to come from this

milk bonanza in Ireland.

What’s not to love? A lot, according

to those concerned with environmen-

tal issues, from water quality to climate

change, and to those on what can be

called the rural left.

Beef production in general is very

ineﬃcient with extremely high carbon

emissions per kilo. Dairy cattle in Ireland

produce 9% more methane emissions

per head now than in 1990, though they

are admittedly producing more per head.

Simon Coveney has said he is determined

to make sure Irish farmers do not have

to scale back on environmental grounds:

“Any old fool can reduce emissions by

simply reducing production. There’s no

challenge in that”, he told the Dáil last

month...The challenge for the globe, and

for Ireland in terms of giving leadership

in this area is ﬁnding a way to produce

more food while reducing the overall

emissions footprint of our production

systems”.

The IFA without whose say-so Coveney

never even gets up in the morning has

welcomed the absence of what it calls

“divisive and unachievable sectoral

targets” in the Climate Action and Low

Carbon Development Bill. This is code

for welcoming the absence of eﬀective,

sustainable, time-tabled targets.

The Taoiseach and Minister Coveney

have argued that Ireland’s national

emissions reduction target which is to be

agreed at EU level “must take account of

Ireland’s speciﬁc circumstances includ-

ing the size and importance of our

agri-food sector”. Try selling this mes-

sage to other unsustainable sectors like

Polish coal-miners. Ireland’s binding

HE ending of milk quota has

been greeted with almost

unbridled hoopla in Ireland.

From the countdown clock in

Ag House, where the Depart-

ment of Agriculture has its HQ to

features on foreign media about Ireland

and milk, the coverage has been, mostly,

glowing.

So what was this quota thing the agri-

food sector is so happy to be rid of?

Quota was a limit, an imposed ceiling,

placed on milk production 31 years ago.

This was an era of milk lakes and butter

mountains, when Europe could produce

far more than it or anyone else could

consume. Levies were imposed when

production went over the pre-set level.

Now, with strong export potential in

emerging economies, especially China,

quota has been lifted and production

can rise again. World trade in dairy has

grown from 53 to 65 billion litres in

just four years, while demand in China

is expected to grow by 43% by 2019.

By European standards, Ireland is a

big shot in dairy in many respects. While

quota has limited production to about 5

billion litres, Ireland has compensated

by placing more emphasis on processing

and value-adding than other big produc-

ers such as Germany. Companies based

in Ireland trade over 15% of the world’s

infant formula, while new processing

plants, such as Glanbia’s €235m unit in

Kilkenny, have opened to much fanfare.

Ireland has also already begun investing

far more in dairy-processing research

and development than its EU competi-

tors do.

Food Harvest 2020 has been the blue-

print document for much of this growth.

Ostensibly not a Department of Agricul-

ture plan (despite the Department logo

being the only one on the front cover

page) this industry growth plan predicts

a 50% increase in milk production in

Ireland by 2020. And Ireland is on target

to deliver this.

Dairy is already the wealthiest of all

the sectors in Irish agri-food. Dairy

farmers are price-makers and not

price-takers, in part because they have

Ending quotas will make big articulate dairy farmers rich but damage rural life and

the environment. By Oliver O’Connor

Milk battle

ENVIRONMENT Milk Quotas

10,000 new

jobs, and

300,000 new

cows, are

projected to

come from this

milk bonanza

in Ireland

“

so that’s OK then

April 2015 61

2020 emissions target is to achieve 20%

reductions in emissions relative to 2005.

Currently, we will only achieve 2%. As

Irish agriculture produces nearly a third

of national emissions, it is a major part

of this national failure. Agriculture had

steadily reduced emissions until 2011

but Food Harvest 2020 plan is rapidly

reversing that progress.

“Rural left” sounds like an oxymoron

in Ireland. However, agri-food is so

dependent on subsidies, that the distri-

bution of this bounty has helped foster a

divide between notions of fairness and

product ivit y a round Europe, includ ing in

Ireland. The new Common Agricultural

Policy (CAP) was supposed to be fairer –

to distribute funds in a more equitable

manner. This has been curtailed, due to

the hard work of Minister Coveney and

others, who have argued that fairness

would somehow punish those who are

more ‘active’ and productive.

The 10,000 member ICSA – Irish

Cattle and Sheep Association – have in

some signiﬁcant ways broken ranks.

Unlike Simon Coveney, they see the need

for a beef regulator, criticise the Bord

Bia Quality Assured scheme, and argue

against the unfair implementation of

the CAP and the potential sacriﬁce of an

Irish beef industry in the EU-US trade

agreement, TTIP (Transatlantic Trade

and Investment Partnership). Similarly,

farmers in the BMW (boarder midlands

west) region and other places tradition-

ally considered to have poorer land are

forming small organisations opposed to

current political trends, or joining the

organic-farming scheme in increasing

numbers.

This rural left is represented in Euro-

pean dairy aﬀairs by organisations like

the European Milk Board. It is not so

much potential growth in dairy that this

organisation worries about but rather

the eﬀects of price volatility and the loss

through consolidation of small-to-medi-

um-sized producer.

Their protest in Brussels on 31

March reﬂected this. Seeing a real shift

in power from producers to compa-

nies, the president of the EMB Romuald

Schaber warned “thanks to the expected

milk surplus, as of now conglomerates

will dictate terms and conditions to the

farmers even more than before. Prices

will be rock-bottom, as Europe’s farm-

ers will have even less market power to

achieve a cost-covering milk price in the

future”.

The EMB suggest what they call a

‘market responsibility programme’ to

ease the transition from quota. This

would balance production, based on

price and availability, and penalize over-

production if the demand is not there.

Certainly more volatility is on the

cards – even according to bullish EU

Agriculture Commissioner Phil Hogan.

Volatility will hit those with fewer eco-

nomic resources the hardest. A smaller

producer suﬀers more, proportionally,

with a plummeting price than the better

resourced farmer. It’s a get-big or get-out

dynamic, as debts get racked up to grow

the business, in a context of severe price

ﬂuctuations.

Consolidation too by definition

excludes the smaller farmer. While

10,000 jobs are predicted for Ire-

land, 40,000 have been lost in the last

30 years in dairy already anyway, as

the remaining 18,000 dairy farmers

hoovered up or rented their land, and

available quota.

How long before land-grabbing, so

prevalent in eastern Europe, where

farms of many thousands of hectares

now operate, emerges in Ireland?

It was not always going to be thus.

In what was purportedly Ireland’s ﬁrst

sociology book – ‘Power Conﬂict and

Inequality’ (1982) – Hilary Tovey wrote

of processes of modernisation and mar-

ginalisation through milk. Dairy co-ops,

when ﬁrst established were a core part

of the drive towards independence and

expressed something of a collectivist,

socialist vision of and for rural Ireland.

The means of production (through the

Land Acts) and then distribution (dairy

co-ops) were, quite suddenly, in the

hands of the formerly oppressed.

The genuinely co-operative nature

of the movement lessened as a profes-

sional managerial class emerged, with

the interests of the larger, wealthier

producer at heart. Then sell-oﬀs, where

some got very rich while others, and

the rest of rural Ireland, were cast aside

became pervasive and characteristic.

Some genuinely co-operative models still

exist, such as Carbery in west Cork, but

the momentum has been in the wrong

direction.

Nothwithstanding the breaking of

rank by beef farmers, what’s curious

is how diﬃcult it is for farmers, to go

against the grain in Ireland. This is par-

ticularly true of the dairy sector which is

conservative despite, or perhaps because

of, the co-operative dimension. Barely a

whisper of concern – the opposite in fact,

envy – was raised when word of a 500-

cow unit in Kilkenny ﬁrst emerged.

Elsewhere in Europe, the small guy

rails against this. In France there is a

strong ‘anti-massiﬁcation’ movement

against the emergence 1000-cow - diary

units. Spearheaded by small-farmer

organisation Confederation Paysanne,

hundreds regularly attend what are often

very militant protest actions, including

one involving the actual dismantling of

a 1,000 cow unit (and another famously

demolishing a McDonalds). An uneasy

compromise of 500-cow units now pre-

vails in France following the attempt at

1,000-cow units.

Confederation Paysanne and other

small farmer organisations want to keep

rural areas vibrant and to keep small

farmers on the land.

Consolidation connotes ever bigger,

more mechanised farms with larger

fields, higher-yielding cows, fewer

hedgerows, more nitrogen run-oﬀ, more

methane emissions and more agri-in-

dustrial inputs. It means a continuation

of rural population decline, as ever fewer

people own land, and the jobs that are

left are for labourers and in processing

units.

So will the rising milk tide lift all rural

boats, or smash them in a tsunami and

destroy rural life and its setting?

Processing and industry jobs in urban

areas may rise, but the mosaic landscape

with patchworks of ﬁelds bounded by

biodiverse hedgerows, where a large

number of landowners reside will fade

away with consolidation.

If co-op federations emerge, like Valio

in Finland, which is owned by 17 co-ops

and itself owns 15 processing plants,

the wealth may continue to be some-

what spread out, at least among dairy

farmers. For the rest of us in rural Ire-

land though, expect to be looking at a

lot more cows than people in the years

ahead. •

Irish

agriculture

produces

nearly a third

of national

emissions but

had steadily

reduced

emissions until

2011 – Food

Harvest 2020

plan is rapidly

reversing that

progress

“

ENVIRONMENT Milk Quotas

the future:

Glanbia,

Kilkenny