Plans by the Irish government to help fund a €300m cash injection for the country’s dairy sector should be a wake up call for the UK’s milk industry, the NFU has said.

The Republic’s agriculture ministry has said it will provide €100m (£68m) over three years for restructuring and product development. It hopes industry will provide a further €200m (£136m).

NFU chief dairy advisor, Tom Hind, said the move should give “added impetus” for the industry to progress with rationalisation.

“People are now waking up to the fact we’re not operating in a vacuum,” he said.

It also strengthened the industry’s case when lobbying the Office of Fair Trading to look more favourably on rationalisation, he added.

Independent consultant Mike Bessey said it was impossible to quantify the impact of the Irish cash boost on UK farmers, but industry leaders were right to be concerned.

Ireland is the biggest exporter of dairy products to the UK and there are fears that the extra funding could see volumes increase at the expense of producers here.

“It’s a subsidy, let’s not beat about the bush,” said Mr Bessey.

Last year, Ireland supplied 75,000t or almost 22% of the Cheddar consumed in the UK. Butter imports accounted for 15% of consumption.

Dairy UK said it had lobbied DEFRA about providing similar support but had been told this was not on the agenda. 

NFU Scotland vice president Jim McLaren said: “This is the difference between a government concerned about one of its primary industries and one that patently is not.”