Dairy crisis: Michelle O'Neill says European intervention needed to tackle milk prices

image captionMs O'Neill will lead a delegation in the coming weeks to meet EU farm commissioner Phil Hogan

Northern Ireland's Agriculture Minister Michelle O'Neill has called for intervention at European level to tackle the crisis within the dairy industry.

Dairy farmers have warned they will go out of business if they do not receive higher prices for their milk.

The price paid to farmers is about 19p a litre but they say they need about 27p a litre to break even.

Ms O'Neill said she would continue to lobby Europe to address the issue.

She will lead a delegation in the coming weeks to meet the EU farm commissioner Phil Hogan.

He has, so far, resisted calls for the EU to raise the milk "intervention price".

'Global problem'

"What we need to see is intervention at a European level, particularly in relation to price intervention that would allow the market to bottom out which would allow us then to start to build again," Ms O'Neill said.

"Phil Hogan can continue to live in an ivory tower if he wishes but this is a global problem. It's not just a problem for farmers in Northern Ireland, it's a problem right across the board on a European level."

UUP MEP Jim Nicholson has brought a report before the European agriculture committee which was endorsed by members and will be voted on by parliament.

In the report, Mr Nicholson calls for the intervention price of milk to be raised - that is the base price that the EU pays, regardless of market conditions.

'Cash flow pressures'

"So far, the door has been slammed in our face by saying yes, there is a problem. But it's not a crisis so we have got to continue that battle and that is what I will do," he said.

image copyrightAFP
image captionOn average, farmers need about 27p a litre to break even

Ms O'Neill said her staff had been working with farmers in Northern Ireland to address "cash flow pressures".

"They've been working right throughout the spring and the summer around looking at training events, looking at specific issues around cost control, benchmarking, business management, so helping farmers with practical things on the ground and what they can do in relation to their own costs," she said.

"I would encourage all farmers who are in difficulty to speak to dairy advisors."

The Stormont agriculture committee is being recalled on Thursday to discuss the crisis, and farmers are planning a protest.

DUP MLA Edwin Poots, who sits on the committee, said the dairy industry was traditionally a sector which had "steady prices" and "reasonable profit".

"Over the course of this past number of years, we've had huge fluctuations in prices and the dip, on this occasion, has been extremely long and extremely deep and farmers are being hit like never before," he said.

"Dairy farmers, traditionally, have borrowed much more extensively from the banks and consequently there is a significant danger should nothing be done to actually support the dairy industry at this time.

"As a result of that, many farmers, without assistance, will end up going bankrupt and we'll see considerable numbers of farms in our newspapers up for sale by the latter end of this year."

John Henning from Danske Bank said "inevitably" there was "more pain to come" for dairy farmers.

'Support package'

"We're making those phone calls, we're calling out to see those dairy farmers to identify where there are cash flow difficulties and working with those farmers to help get them through the current difficulties," he said.

image copyrightThinkstock
image captionThere are more than 2,500 dairy farms in Northern Ireland

"We've developed the dairy support package to help those farming customers through the inevitable cash flow difficulties which will follow the current milk price.

"Analysts are generally positive about the longer term outlook for the dairy sector and we share that optimism, but increasingly the industry recognises that agriculture is really operating in a global environment."

There are more than 2,500 dairy farms in Northern Ireland.

More on this story