Speech of Fianna Fáil Spokesperson on Agriculture, Éamon Ó Cuív TD, Dáil Private Members’ Motion on a Fair Price for Farmers We all recognise the right of all workers to get a fair days pay for a fair days work. Regardless of the industry, workers are entitled to make a decent standard of living from their hard work and effort, yet today in the Irish agricultural industry the primary producer in the food chain is being systematically undercut. The cornerstone of the industry, the family farm, is being whittled away by mounting pressure on price and market manipulation. The ongoing beef crisis is a clear case in point. Some 80,000 dry-stock farmers are seeing their work and effort sapped by large processors and supermarkets. Interestingly, the Irish Farmers Journal last week reported that a farmer in Ireland could expect to get €350 less than a farmer in Britain for the same-type animal. This is a toxic cocktail of short-term greed and Government indifference and it is destroying the basis of Irish agriculture. My party introduced this Private Members Motion to highlight the increasing pressure that ordinary farmers are under across the country. Of course, this pressure has massive repercussions, not only for the Irish economy but for rural life and society. I am delighted to see here the Minister of State with responsibility for rural development, Deputy Ann Phelan, because I note, on the issue of the shape of rural society, it is not only about the economy. Often we talk about the society as if it was an economy but the economy is only a means to an end, in terms of creating a society that is a good place for people to live in. It is striking when one looks at the 1916 Proclamation, where there is an interesting sentence which talks about pursuing the happiness and prosperity because they recognised that it was not all about economy. The economy was hugely important, prosperity was important, but so was the happiness of the people. In other words, the society that we are trying to create, which, in terms of Irish agriculture, is centred around the family farm rather than some corporate-type farming, is vital to rural society. Agriculture is also our largest indigenous industry. On the agri-food sector, the Ministers colleague, the Minister of State, Deputy Tom Hayes, was in my village, Corr na Móna, today looking at the sawmill. Fair play to Deputy Kyne, he made it back quicker than I did. I had a bit of car trouble on the way back. The agrifood sector has weathered the storms of the recession to continue to play a central role in our economic life. Agriculture provides 60% of employment within the agrifood sector, which supports over 300,000 jobs across the country. Agriculture, including forestry, is still the engine of the rural economy. When one attacks and undermines the basic unit of that industry, the family farm, it will have implications for the broader economy. Looking to the future of the industry, the sweep of the Food Harvest 2020 objectives sets out a bold vision for what we can achieve in Ireland. On a document prepared by the previous Government, it would be fair to say that the Minister has certainly bought in to trying to increase the take from agriculture. The major investment in both on-farm facilities and broader industrial capacity over the past decade has enabled our largest indigenous industry to grow and expand. There is untapped potential for the agricultural sector to flourish as the main employer in rural Ireland. However, this will be dead in the water if the price return to farmers is completely hollowed out. The price has become vital in the context of the reduced funding available in the latest round of CAP funding and no matter what way we dress it up, there is quite a drop in funding. For example, direct payments between 2011 and 2013 dropped by 10%. They are down again this year and they will be way down next year, and the new CAP is a much smaller CAP than the last one. The Rubicon of reducing the CAP budget has been crossed and will inevitably come under further pressure in future years. EU subsidies will be harder to maintain over the next round of negotiation. This highlights the pressing need to emphasise a fair price return for farmers in the future. When the issue of export refunds was mentioned to officials on a recent visit to the European Union, the No was so firm. If the market will not pay the price and the subsidies are reducing, one can understand the pressure the farmers will come under. Under Pillar 1, the single farm payment to Ireland has been reduced by €42 million per annum, from €1.255 billion to €1.213 billion, a 3.3% cut. With modest inflation of 7% over the period of the CAP, this is a 10% cut in real terms over the seven year period. Under Pillar 2, €2.2 billion in EU funding for Ireland amounts to €313 million per year. This is a 14% decrease in EU funding. With inflation at 7%, this is a 21% cut in EU funding over the seven year period. As that got cut, of course, the matching funding from the Government got cut. Overall, Ireland will see a reduction of 10% in Pillar 1 and 21% in Pillar 2 up to 2020. This fall in funding will be felt inside the farm gate in every farm in Ireland over the long term. This shortfall must be met by a fair return to farmers for their produce from processors and retailers. Under current manipulation, the CAP is effectively being exploited by these big supermarkets and processors to subsidise themselves by keeping farmers financially viable via State aid rather than through a fair price. Addressing the issue is vital to the long-term viability of the agrifood industry in Ireland. All we have to do is think back to last Christmas and the manipulation of the vegetable and horticultural sector, and the huge effect that had on producers. We are aware of the situation with liquid milk. When one buys a litre of milk in a shop for €1, for example, 11 cent less of the price goes to the farmer now than was the case in 1995 and 11 cent more goes to the processor, or the supermarket. In most cases the processor is a co-operative, however, and we know the money is not going to co-operatives. That is despite the fact that the labour input into a litre of milk in a supermarket is minimal because the processor puts it on the shelf and customers take it off the shelf. All the supermarket has to do is provide the space and to scan the barcode at the checkout. In many supermarkets staff do not even have to do that because people scan the barcode themselves at the automated checkout. In the past year since the price issue came up it is interesting how many times the Minister said we should let the market look after itself. It took the Minister a long time to set up the beef discussion group but it is only a talking shop. The Minister will tell me one must allow the market to function, as that is what he has said to me previously. The reality is that we do not say the market should dictate to the consumer because we realise that if were to do so, the very powerful interests would manipulate consumers and they would lose out. We have a significant amount of international and national law to ensure consumers cannot be abused. The ordinary farmer is the other weakest player. A producer group is a step in the right direction but a very small one. It is a little naïve to expect such a group to solve the problem. It is important for the Government to set out a framework in which the market can operate, and that through legislation both in this country and the European Union we would ensure a level playing pitch for all players. If the Minister believes that is already the case then he should talk to a liquid milk producer, a vegetable producer, a potato grower, a horticultural producer, a strawberry grower or beef farmer. The Government has abandoned its role as the custodian of a fair market. It has left farmers exposed to the power of processors and massive supermarkets who call the shots. The single farmer does not stand a chance against multinational companies who have revenues that rival the revenue of small countries. Some supermarkets are even bigger in power than some of the smaller countries and transnational in character. The Minister should have stepped in to intervene at the beginning of his Ministry. He knew he would play a pivotal role in the European negotiations and he should have stood up for ordinary farmers across Europe. To put it mildly; the Minister has shrunk from the challenge. When we were discussing the Common Agricultural Policy, CAP, I kept asking the Minister what he was doing about price. The issue is fundamentally European as well as national as farmers across Europe are affected. Given the reducing subsidies provided by the new CAP, price should have been a cornerstone of discussions. It is interesting to examine EU law. Article 39 of the Lisbon treaty sets out the objective of securing a fair standard of living for farmers. It is an integral part of EU agricultural policy. Given the multinational composition of large supermarkets and processors in the interconnected agrifood market on the Continent, it is vital that a joined-up EU approach is taken. Whether in the dairy, beef or vegetable sector, farmers can be left vulnerable to big supermarkets manipulating prices. It is important that the European Union would take the lead in achieving that across the Continent. The successful passage of EU Agriculture Commissioner designate, Phil Hogan, through scrutiny in the European Parliament last week moves him closer to taking up the position in the coming weeks. The Minister must work closely with him to achieve a strong, fair market framework in Europe. The future of European agriculture is reliant upon a fair price for a good product. The success of the CAP in achieving food security and underpinning agriculture as the cornerstone of the rural economy and rural communities is reliant upon a fair price return. I note with concern that the Governments counter-motion fails to address the Lisbon treaty provisions. The beef crisis is threatening the livelihood of dry stock farmers throughout Ireland. Dramatic falls in price have been caused by a combination of arbitrary specification changes by processors and artificial trade barriers with Northern Ireland and Great Britain due to the influence of supermarkets. The quality assurance scheme has been exposed as a tool for processors to artificially suppress prices. We are in favour of quality assurance but it cannot be a method by which the supermarkets and processors artificially penalise farmers for perfectly good cattle and set barriers that have no justification in terms of quality of animal or meat. The suckler cow sector is being hammered by the fall in price, which means the backbone of the beef industry is under threat. The current crisis comes hard on the heels of the fodder crisis in 2013, which pummelled the income of dry stock farmers. Teagasc revealed that cattle-rearing farms saw incomes decline by 22% to €9,469 in 2013 due to higher production costs associated with severe fodder shortages early last year. The beef crisis is hitting an already exposed group. The crisis is having a greater impact in certain parts of the country than others. The shift in prices is driving struggling farmers over the edge, which will damage production, employment and the prospects for future growth under Food Harvest 2020. The crisis has illustrated the grave imbalance at the heart of agriculture. Primary producers are at the mercy of a system that is immensely more powerful than they are. Large processors are eroding margins while big supermarkets are working to expand their share of the final price. The misuse of labelling and specifications to achieve that reveals the way the power is used by those who have it, to manipulate the market. I have set out the problems at hand and the Governments responsibility to address them. They are the steps that should be followed by the Minister, Deputy Coveney, to get to the very root of the issue. It will take time to change the situation on a Europe-wide basis. I hope the Minister will convince the new Commissioner designate - I will certainly try to do so - that he should make a fair return to all farmers across the European Union, so that from the east to the west and from north to south, farmers and family farms - the cornerstone of European agriculture - will be defended. In the meantime farmers face another hazard: as discussed during Question Time, next year will see the smallest payments over a 14 year cycle to farmers under the CAP. This will happen because, as the Minister knows, GLAS will not pay out significant money next year and REPS and AEOS payments will be minimal. Farmers must pay bills now and we propose something very simple. There should be an introductory payment next year of €200 per head under the beef genomics scheme to bolster suckler cow income levels. This can be contrasted with the €80 proposed by the Minister. I will argue with the IFA and say it is wrong when that is the case as I am entitled to do so. I take everything the IFA says seriously, even if I do not agree. We suggest that payments should be levelled over the seven year cycle as this would be easily done. An introductory payment of €200 should be paid as this would encourage farmers to join the genomics scheme for three years, something the Minister hoped to achieve. This would produce more data on the genetic base of the farming herd. We call for the immediate establishment of an independent beef regulator to investigate, assess and advise on sharp practices in the beef industry and to try to determine who gets what from the animals provided to factories - something the French are doing. We need to learn who is making a profit from this because this information would highlight much of what we seek today. A beef regulator would give ordinary farmers a strong and independent representative in this David and Goliath battle that would stand up for a fair return. Also, Britain has a food ombudsman and Ireland has not provided for this in the new Bill - we need one. Since I was appointed as the Fianna Fáil spokesperson on Agriculture I have argued that two pillars are required to make Irish agriculture strong. First we need the CAP to be fairly distributed, on an objective basis, across the various schemes. Second, the issue of fair prices for farmers must be addressed. I have always advocated this two-pillar policy. I think it is fair to say that the Minister gives the impression of being the Minister for agri-business but not the Minister for farmers. It is the impression people get from the Ministers speeches. The Minister should read his own speeches. We want good family farms in Ireland and we want all of the land to be farmed. We want people to get a fair return for their products. We believe it is vital for the future of rural Ireland, the quality of food produced here and the image of Ireland as a green country that we maintain the family farm as the cornerstone of agriculture. We must not allow corporate farming that decimates rural Ireland. -ENDS-
Posted on: Wed, 08 Oct 2014 10:01:51 +0000
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