Donal O'Regan, 7 Jul
A HISTORIC meeting of dairy farmers was held in Adare last Thursday,
June 27, as close to 200 farmers attended the first public meeting of
the newly established producer organisation of dairy farmers - Munster
Dairy Producer Organisation (MDPO).
This was the first public meeting of a producer organisation in
Ireland.
Coincidentally, some 135 years ago, a corresponding historic event was
held 40km south off Adare in Dromcollogher in 1889 with the
establishment of the first co-operative creamery in Ireland.
There was a positive reaction from the floor in the Woodlands to
speakers and a willingness of farmers to join the producer organisation
so as to collectively negotiate new milk supply contracts.
The producer organisation concept is governed by EU law and was “born
out of the need to bring in robust arrangements, backed up with EU law,
to strengthen the position of farmers to negotiate with milk and other
farm products purchasers and food retailers”.
In his address to fellow farmers, James Doyle, MDPO chairperson said
that the establishment of the producer organisation was “born out of
frustration, desperation and lack of representation in dealing with
milk purchasers down through the years”.
“We were given supply contracts ‘on a take it or leave it basis’ with
no negotiation. Current suppliers to Kerry Agribusiness are under
formal notice that their current contracts will end at the end of
March 2026. In the absence of a producer organisation, we farmers are
left without any body to negotiate new contracts lawfully and
collectively on our behalf to take effect in just 22 months from now.
“The principal advantage of an approved producer organisation is that
its members are given a licence to negotiate legally binding supply
contracts, including in particular price, with a purchaser of farm
output, which at present in Ireland is mainly milk and cattle for
slaughter,” said Mr Doyle.
READ MORE: Row over ownership of €1m Limerick farmland sold by receiver
comes before High Court
MDPO is now fully established and has commenced signing-up dairy
farmers, mainly those who are currently supplying milk to Kerry
Agribusiness. The establishment and running of a producer organisation
is governed by EU and Irish legislation and certain formalities have to
be followed to get a PO approved by the Department of Agriculture.
These formalities and rules have now been met in full by MDPO. It was
formally approved by the Minister for Agriculture last April. This work
was undertaken by Ciaran Dolan, a practising barrister and agribusiness
consultant.
The producer organisation enjoys what is known as “block exemption”
from competition law. The EU rules on competition are strict to the
extent that they prevent even a small number of farmers coming together
to negotiate price with a milk processor.
The core purpose of MDPO is to collectively negotiate the best milk
price and supply terms for farmers and MDPO is open for discussions and
contract negotiations with any milk purchaser, they say.
The formal recognition of the MDPO represents a watershed in the Irish
dairy industry. No longer are dairy farmers on their own where milk
purchasers can offer milk supply contracts to individual farmers
without any real negotiations and on ‘a take it or leave it’ basis, say
the MDPO.
Dairy farmers, who are not supplying a co-op, can now collectively
negotiate with any milk purchaser of their choice and agree lawfully
enforceable milk supply contracts with the full backing of EU law.
MDPO by getting formal approval will now provide an important
negotiating platform for dairy farmers in the Munster region, said Mr
Doyle.
“We will collectively endeavour to put that into practice to secure the
best possible milk price and supply terms for dairy farmers,” said Mr
Doyle.
Current milk suppliers to Kerry Agribusiness and other dairy farmers
were invited to attend a series of three public meetings in Limerick,
Kerry and Clare, arranged to provide farmers with full information on
the role and plans of MDPO, and to provide an opportunity for farmers
to sign up as members.