A UNIVERSITY PROFESSOR has said Irish dairy firms targeting African nations for growth risk are potentially undercutting local producers.
Patrick Bresnihan, a geography professor at Maynooth University, said European subsidies paid to Irish dairy farmers have given them an unfair advantage compared to small farmers in African nations.
He said this has been a result of programmes such as the EU’s Common Agricultural Policy (CAP), which for decades has paid subsidies to farmers across the continent.
“Previous figures show domestically produced milk in Senegal is about $1 per litre. Reconstituted skimmed milk imported from the EU is about 50 cent per litre,” he told The Journal.
“If you think about how irrational that seems, that with all the costs of something produced in Ireland or Europe, exported and reconstituted, it could still be half the price. There has to be something else going on, and that’s where the subsidies come in.”
Bresnihan pointed to figures from state agency Teagasc, which showed that Irish farmers have received about €50 billion in CAP funding since 1973.
“That is a huge amount of money developing farms and doesn’t include indirect subsidies they have, which they don’t have say in Senegal, like better water infrastructure,” he said.
Bresnihan said the cheaper products being imported from the likes of Ireland have put many local African producers out of business while also contributing to climate change, as significant emissions are produced transporting produce thousands of kilometres from the EU.
His comments were prompted by a business event hosted by several state bodies, including the Department of Agriculture and Food, which aimed to explore “opportunities for agri-food business cooperation” between Ireland and Africa.
For decades, the EU placed quotas on milk production. This was aimed at stopping overproduction of dairy products, such as the infamous ‘butter mountains’ produced in the late 1970s when guaranteed prices by the EU led to a glut of dairy products.
However, the EU said this system was preventing European producers from responding to “growing global demand”, and it removed dairy quotas in 2015.
Since then Irish dairy producers have significantly increased production.
As a region with relatively low development which is also set to experience major population growth in the coming decades, African nations have become increasingly popular markets for dairy firms.
Bord Bia reported that imports of Irish dairy products rose by an average of 4% in Ghana, 8% in the Ivory Coast, and 10.5% in Senegal, every year between 2010 and 2021.
All of this growth was driven by increased sales of fat-filled milk powder.
In the same report Bord Bia said there is “still a large informal market of dairy ingredients in West Africa”, but added: “It is fully expected that the influence of the informal market will decline in the coming years as the market matures”.
The organisation said this will be driven by “consumer demand for a safer, more quality, but affordable, product”.
Bresnihan said the fact that Irish produce is cheaper is due to an edge gained in EU assistance in previous decades developing Irish farming through the CAP.
“Consumers prefer the taste of local milk and dairy, the main reason they don’t buy it is that it’s more expensive,” he said.
“The question is, why is it (EU and Irish dairy) are so cheap. This is where you get into subsidies and the advantages that Irish and EU dairy producers have benefited from.”
Figures from Teagasc show subsidies and direct payments such as CAP accounted for about 14% of Irish dairy farm income in 2022. This was down from 34% of income in 2018, as dairy farmers sales have increased and subsidies become less important following the quota abolition.
However, Bresnihan said the previous decades of subsidies already gave Irish farmers a strong base on which to build, leading to uneven competition with local African producers.
“I’m sure it’s not in bad faith (from Irish dairy producers), but there should be an understanding that this isn’t a level playing field,” he said.
“There could be a view that they are much less efficient in Senegal than in Ireland, but that isn’t the case, there has just been a history of uneven development.”
However, Pat McCormack, the president of the Irish Creamery Milk Suppliers Association, said Irish dairy products are an important source of nutrition for African consumers.
“Local providers don’t have the infrastructure to feed their nations. We believe Irish dairy can feed a global population, including Africa,” he told The Journal.
This isn’t about flooding Africa, or any other market, with cheap goods. It’s about providing sustainable food at affordable prices.”
Asked about CAP subsidies over the decades, McCormack said: “Those payments from previous years were there for a reason. We were constrained by volume constructions, and now the opportunity to grow business has been phased in with the abolition of quotas”.
On the issue of environmental concerns, McCormack said: “If you look at Irish dairy over the last 10 years, we have reduced our emissions…
“While we would be concerned about transport emissions, it’s more than made up for by the efficiency of the sector as a whole producing dairy products.”
In a statement to The Journal, Bord Bia said 15% of Irish dairy exports are to Africa.
“Through the Department of Agriculture, Sustainable Food Systems Ireland, which Bord Bia part funds, works with regional agencies on the ground in Africa,” it explained.
Bord Bia said the organisation aids local producers in “knowledge exchange projects, value chain development and implementation around food systems transformation”.
Regarding emissions, the Department of Agriculture said in a statement: “Ireland’s carbon footprint per unit of milk produced is one of the lowest amongst milk-producing countries because of our grass-based system.
“Climate action is a priority across our country as a whole. Irish dairy farmers and the dairy industry are no less conscious than other sectors of society of the need to play their part in driving down emissions.”
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