The news that the two western dairy co-ops, NCF and Kiltoghert, have agreed to merge is welcome. Unfortunately, this laudable decision is unlikely to lead to any rush among the rest of the Irish dairy industry to rationalise operations.
You're nobody in the dairy industry unless you have your own processing plant, seems to be the motto. And even if every economic indicator suggests dairy farmers would be a lot better off if they got rid of the duplication of facilities, the move to bringing a semblance of economic sense to the industry is snail-paced.
The only mergers of any real scale have been the Mitchelstown/Ballyclough marriage to create Dairygold and the Avonmore/Waterford merger to create Glanbia. Glanbia's prenuptial agreement might not be a model for the industry but the broad argument is still perfectly valid.
Most of the rest of the developed dairying world believes that one giant processor is the best way to cope with WTO and Agenda 2000.
An Irish start could be made in Cork, where four co-ops can happily co-exist as joint owners of Carbery Milk Products and three can jointly own Clona Dairies. The boards of the co-ops tried and failed to come together as one unit a few years ago. Maybe now is time for another effort.
