The Irish dairy industry was warned yesterday in Dublin to use the time before the Agenda 2000 CAP reform cuts come into place to position itself for more drastic changes which would take place after that.
Mr John Tyrell, the director general of the Irish Co-operative Organisation Society, said the dairy sector would face a 15 per cent price cut in 2005 under the reforms.
He said that while this would reduce the loss which would have occurred if the phasing-in of the reduction had been approved, it meant that the sector faced major changes in one step.
"Our dairy sector knows the framework for support policy to 2006. We should use this time up to 2005 to position farmers and the processing sector for more drastic changes which will occur after that," he told a conference organised by the ICOS.
"The dairy industries in Denmark, Germany, US, New Zealand, Holland and others are consolidating and focusing on further efficiency of processing and marketing in order to deliver a better return to dairy farmers," he said.
Mr Tyrell said that in the past 10 days in Denmark, MD Foods and Klover Milk merged and now processed almost 90 per cent of Denmark's milk.
The merger had been resisted by Klover for some years but when it was recognised that farmers were losing by remaining separate, the decision was taken to merge the two businesses.
"The Irish dairy sector is a vital part of our agri and rural economy. Our co-ops also have to take steps which will deliver the best long-term return to dairy producers," he said.
Mr Prehen Mikkelson, executive director of the Danish Dairy Board, said the postponement of the milk reform would in the short term pose a serious risk of refund reductions due to budgetary problems and a risk of a non-compensated fall in milk prices.
He said that in the long term it would pose a risk of accelerated adjustments to the World Trade Organisation agreement and to the enlargement of the Union.
Mr Michael Deely, Bord Bia's beef and livestock specialist, said that in future the Irish beef industry had to rely on commercial markets instead of intervention.
He said the Irish food board planned to increase the percentage of steer beef going to the EU from its current level of 25 per cent to 42 per cent, or 400,000 head of cattle.