MDPO interim chair, James Doyle
The Munster Dairy Producers Organisation (MDPO) is now fully established and has commenced signing-up dairy farmers mainly those who are currently supplying milk to Kerry Agribusiness.
The MDPO was formally approved by the Minister for Agriculture last April.
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.
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.
Dairy farmers can now collectively negotiate with any milk purchaser of our choice and agree lawfully enforceable milk supply contracts with the full backing of EU law.
The EU legislation for producer organisations was introduced to collectively strengthen the position of farmers in the marketplace.
MDPO by getting formal ministerial approval will now provide an important essential negotiating platform for dairy farmers in the Munster region.
We will collectively endeavour to put that into practice to secure the best possible milk price and supply terms for dairy farmers”.
Current milk suppliers to Kerry Agribusiness and other dairy farmers are invited to attend one of series of public meetings of dairy farmers 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.
Membership application forms will be available at each of the meetings.
The schedule for the public meetings this year is as follows:
- June 27 at Woodlands Hotel Adare;
- July 2 at the Rose Hotel Tralee;
- July 3 at the Woodstock Hotel Ennis;
All the of the meetings commence at 8:30p.m.
Current supplies to Kerry Agribusiness are under formal notice that their current contracts will end at the end of the March 2026.
In the absence of a PO, we farmers are left without anybody to negotiate new contracts lawfully and collectively on our behalf to take effect in just 22 months from now.
MDPO
MDPO has completed its rulebook and has lodged it with the department.
MDPO has also established an Interim Council made up of 21 dairy farmers from Kerry, Limerick and Clare. Election of a Council by Members will take place in due course.
The declining strength of individual farmers in the marketplace has been the subject of government attention in the developed world for over a century.
Over the last 15 years, in particular, the EU has acted to introduce a number of measures to ensure a fairer, more transparent market for farm products and the food sector.
In addition to legislation for food market transparency, the EU legislation provides for Member States to formally recognise producer organisations. POs were introduced by the EU for the milk sector in 2011.
The principal advantage of an approved PO is that its members are given a license to negotiate legally binding supply contracts, including in particular price, with a purchaser of farm output, which at present in Ireland is milk or cattle for slaughter.
The PO 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 establishment and running of a PO 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. These are relatively simple and are no more than what is required from a good business point of view and for the effective running and control of a PO.
The PO must be established as a corporate entity and MDPO is a registered company with the name ‘Munster Dairy Producer Organisation Ltd’.
The legislation sets down details of what is required to be included in the PO rulebook regarding, in particular, admission of members, financial contribution, elections, rules for infringement of obligations and the minimum period of membership.
A EU-wide study showed that the main motivation for setting up a PO was to strengthen the market position of farmers, both through increased market access and simultaneously, due to strengthened bargaining positions vis-à-vis buyers and suppliers.
