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Suto-Ag.Science 1st year)
The Past: From 1973, when Ireland joined to the European Community, to 1984, milk production increased from 91.3 to 110 million tonnes creating market surplus costs by 1983 equivalent to 30% of the total CAP budget. This costs required the introduction of milk quotas in 1984 which were implemented of fines (super levies) on the delivery milk above each national quota. The adoption of milk quotas guaranteed the price protection for EU producers, but the scheme required the use of export refunds for milk products onto world markets and subsidies for various forms of disposal (ice cream production, animal feeds) within the internal EU market. In 2003, the Luxemburg Agreement brought several major changes in the Irish Dairy Industry. The Irish Goverment decided to decouple payments from production from 2005. The reduction in support was partially offset by the introduction of a Single Farm Payment (SFP) of 1.2, 2.4 and 3.5 cent/litre in 2004,2005 and 2006. The reform of the CAP also involved a reduction in support for skim milk powder by 15 %, and for butter by 25%. In 2008,as a part of the CAP Health Check Ireland was allocated 1% of additional milk quota per year from 2009 to 2014. Ther was also a one-off 2% increase in April 2008. Furthermore, a change in the butterfat adjustment is worth the equivalent of another 2%. Ireland finished in 2010/2011 an estimated 9.8% under the quota. The Irish Dairy Industry today: Providing employment for just over 22,000 farmers, 9,000 employees in the processing industry and an additional 4,500 positions in support and ancillary services, the dairy sector forms the largest component of Ireland’s food and drink industry exporting €2.36 billion annually and representing 27% of all food and drink exports. The market grew by 17% to €957 million over the 2001-2006 period and is projected to grow by 11% from 2008 up to 2012 to €1.115 billion. At farm level, there has been a structural shift with significant numbers choosing to exit the industry resulting in a degree of consolidation. The number of dairy farmers has declined from 68,000 in 1984 to the current figure of 22,042. This decline in numbers has been accompanied by a shift towards larger farm sizes with the average quota rising from 76,000 litres (16,717 gallons) in 1984 to the current average of 231,000 litres (50,800 gallons). The concentration of dairy farming is in the southern half of the country with more than 15,000 dairy farms. In the border, western and midlands there are less than 5,700 dairy farms. This trend in concentration in the southern part of the country is emphasised even more when milk production levels are compared. There has also been a consolidation at processing level and currently the six largest processors control 70% of the national milk volume. In the liquid milk sector there are just fifteen processors. One of the major advantages that Ireland has over most EU countries is the potential production of between 12 and 16 tonnes DM (dry matter)/hectare over a long growing season from pasture.In recent years grazing management strategies have been identified, which increase the proportion of grazed grass and reduce the dependency on grass silage in Irish systems of milk production. Lenghtening the grazing season by 27 days has been shown to reduce the cost milk production by 1
therefore the importance of the long-term leasing increased.66 c/lfor every litre of quota over the person's available quota including whatever fleximilk allocation was received. Failure to acquire additional land adjacent to the milking area will result the spread of intensive indoor high input systems which is undesirable from an enviromental viewpont. Therefore it is important that Ireland obtains a derogation of up to 250 kg of organic nitrogen/ha for these farms at higher stocking rates. his/her quota may be deemed to be dormant.but some important changes have been made.cent/litre. The amount of milk quota per hectare is not specified by the law. The imposition of this directive will result a relatively great financial loss at farm level in the future due to the reduction in dairy farm numbers.In Ireland in dry southern parts this is reduced to less than 3 months.or if he/she didnt produce because of any duly justified circumstances making production temporarily impossible. The reason for this is because grazed grass is the lowest cost feed and can make up a large propotion of the diet over a long grazing season. and may be taken back into the National Reserve at the beginning of the third quota year.seasonality of supply is a major reducing factor of efficiency. The land and the quota link remains in the new Irish milk quota regulations. The penalty in 2009/10 amounted to 28. .500 litres per hectare. If a milk producer fails to make deliveries against his/her quota for two consecutive years. Land purchase price will continue to be high for the future.if he/she sells the quota into the Milk Quota Trading scheme relevant to the 3rd quota year. however a person may not sell land to which quota attaches if the amount of milk quota exceeds 12. Milk production in Ireland is mainly based on spring calving system.There are a few exemptions to this: if the producer goes back into production early in the 3rd quota year.except with the consent of the Minister. Most countries in the EU have a 6 months or longer period when cheap production based on grazed grass can not occur. The Nitrate Directive set a legal limit of 170 kg/ha of organic nitrogen that can be applied per hectare ( a stocking rate of 2 LU/hectare). Peak deliveries during the peak supply month (May) are six more higher in volume.. which enable milk producers to sell land while keeping the quota. At present. Many dairy farms have difficulties because of farm size and farm fragmentation. The other limiting factor of the increased milk production on many dairy farm is the farm structure.than in the lowest production month (January).