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Sustainability key to success of dairy sector says Hogan

Thursday, 3rd January, 2019 10:05pm
Sustainability key to success  of dairy sector says Hogan

EU Farm Commissioner Phil Hogan, dairy executives and ‘The Southern Star’ Brussels correspondent Rose O’Donovan pictured recently at the European Dairy Association’s annual congress at Dublin Castle. Included – from left – Edmond Scanlon, chief executive, Kerry Group; Robert Brzusczak, deputy CEO, S

THE European Dairy Association (EDA) held its annual congress at Dublin Castle last month. Rose O’Donovan, The Southern Star’s Brussels correspondent travelled back to moderate on the Friday morning, where EU Farm Commissioner Phil Hogan and top European dairy executives addressed the 200-strong audience. 

At the afternoon session, Dunmore native and Bord Bia boss Tara McCarthy presented the ‘Origin Green’ initiative to international delegates. 

Commissioner Hogan stated during his keynote address, under the theme ‘A Green Future for European Dairy,’ that improved sustainability will not only generate an environmental and climate dividend, it will also help dairy farmers to maintain their competitive edge internationally. 

The EU farm chief said it was ‘very much in the interest of the industry to follow the ‘green’ agenda, as the market seeks sustainability and the EU must respond to these signals.’ 

Commenting more broadly on climate obligations, the Irish Commissioner said the EU had ‘committed to ambitious 2030 climate and energy targets, where all sectors, including agriculture, have to contribute,’ adding that ‘there are no exceptions …everyone has to put their shoulder to the wheel.’ 

‘We need to be honest and clear-sighted enough to recognise that our agri-food sector needs to increase its contribution,’ while ‘technology and innovation can offer many solutions,’ he added. The Tullaroan native, who is understood to be interested in a second mandate, possibly in charge of trade, also alluded to plans for a long-term EU strategy to achieve zero emissions by 2050, adopted on November 28th. 

Gathering on the historic grounds of Dublin Castle, Hogan told the 200-strong audience of dairy executives and experts - representing more than one-third of the EU milk volumes processed per annum at owner, president or CEO level - the ‘importance of the dairy sector is clear … the EU has a trade surplus of almost €20 billion and you make up 50% of this.’ 

On Brexit, the Irishman thanked the EU-27 for the ‘unity and support shown for agriculture and avoiding any potential market disturbance,’ saying the UK’s decision to leave the bloc was a ‘sensitive subject for the dairy sector across Europe, but particularly here in Ireland.’ Countries such as the Netherlands, Denmark, Sweden, Belgium and France are also exposed to developments in London, he added. 

Following the latest development, Hogan said ‘the simple reality is that free and frictionless trade will require the UK to retain a high degree of convergence with EU rules, as a full 70% of UK agri-food imports came from the EU in 2017”. The UK has the second largest dairy deficit in the world, with around 98% of UK dairy imports of EU origin, he elaborated. 

 

Hedging risk

During the panel discussion on a ‘Solid & ambitious basis for the European dairy sector,’ Kerry Group’s executive director (since October 2017), Edmond Scanlon, called on Hogan to expand the risk management instruments available to farmers, describing the move as a ‘win-win situation’ for the entire supply chain. The Sliabh Luachra native, who joined Kerry’s graduate development programme in 1996, drew attention to Ireland’s unique exposure as a result of the UK’s decision to leave the EU. 

Just over 40% of Irish agricultural exports are destined for the wealthy and sophisticated market of 65 million, while more than 30% of dairy exports go to Ireland’s nearest neighbour. The figure for beef is even higher at 50%. The mantra at board level is clear, ‘we must hope for the best and prepare for the worst,’ with dedicated Brexit task forces in place ‘to mitigate the impact.’ 

Hedging risk at Kerry Group is key, Scanlon added, referring to the global food giant’s international presence. He underlined the need for greater market differentiation, continued investment in innovation and exploring new growth opportunities on 3rd country markets. Further work on attracting young blood into the sector and looking at the demographic of farmers is vital for the continued success of the dairy industry, the son of a dairy farmer and ex-regional CEO of Kerry’s Asia-Pacific region concluded.   

 

‘Origin Green’ 

At the session after lunch on the Friday afternoon, Bord Bia CEO Tara McCarthy presented the ‘Origin Green’ initiative, Ireland’s food and drink sustainability programme established in 2012. The programme is a ‘unifying brand that underpins the food chain … for a more recognised international reputation rooted in the clear evidence and proof of verified green credentials,’ the former CEO of Bord Iascaigh Mhara outlined. 

The voluntary tool, involving farmers, food producers, retailers and food service operators seeks to ‘measure what matters … with the common goal of sustainable food production,’ the Dunmore (just outside Clonakilty) native outlined. Under the initiative, nearly 350 companies are committed to the sustainability agenda, with members representing over 90% of total Irish food and drink exports, the graduate from UCD Smurfit Business School added. 

•  Rose O’Donovan is the Editor-in-Chief of the Brussels-based publication AGRA FACTS. 

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