Dairy farmers have planned a major protest in Kilkenny this week over the cut in prices they are being paid for milk by Ireland's largest creamery.
Last week Glanbia, the largest processor of milk in the State, told farmers it would be cutting the price it was paying them by 4c per gallon.
This drew an angry response from farmers who claimed that this will cost Glanbia's suppliers €13.2 million in a year when they face large bills for overproducing milk under the EU quota system.
Irish Farmers' Association president John Dillon ordered an immediate protest by dairy farmers at Glanbia House, Kilkenny city, on Wednesday next at noon.
"The Glanbia price cut is a body blow to their suppliers. They are telling farmers that their family's income matters less than the Glanbia share price, which went up 7 cent when the price cut was announced," Mr Dillon said.
"With the current over-quota situation, many Glanbia suppliers are also facing big superlevy fines. They could well receive, in the same envelope from Glanbia, a milk cheque cut by 4c/gal and a demand for payment of hundreds or even thousands of euros worth of a superlevy bill," he added.
"Farmers are particularly angry that the board of Glanbia decided to cut the March price in retrospect on top of a superlevy situation.
"The 4c/gal cut comes at the beginning of the milk production season, so it will affect all of the milk produced by farmers for 2005. Altogether, since 2001, Glanbia suppliers have suffered price cuts over 18c/gal, and lost an unsustainable average of over 40 per cent of net income.
"Dairy farm incomes are being used to bolster the 4 per cent margin Glanbia management want to maintain at all costs to maximise the share price. If Glanbia insist on using dairy farmers' incomes to prop up their margin, they will end up short of milk. They need to start planning to secure their milk supplies, and that can only be done by protecting their suppliers' incomes."
Industry sources say this is the first major showdown between the farmers and milk processors since the reform of the Common Agricultural Policy, and neither side can afford to lose.
International dairy markets have become increasingly difficult for Irish producers who are facing progressive cuts in the marketing supports that used to be paid by Brussels.