A report into allegations of a cartel operating in the beef industry has found no evidence of beef processors colluding to keep down prices paid to farmers for their cattle.
The report, commissioned by the Tanaiste, Ms Harney, and published after yesterday's Cabinet meeting, concluded there was no scope for alleged manipulation of prices by wholesalers and retailers. It refuted the allegation that changes in "farm-gate" prices were not reflected in prices at retail level.
The report finds that, while on average it is a low-profit industry, there are periods which are favourable to processors, such as the second half of 1999.
It concludes that simple comparisons between farm-gate and retail prices are inadequate because they do not take account of the weight losses involved in converting live animals into saleable beef. They ignore cost developments in the post-farm-gate sectors, which account for half the value of the total chain.
The report was ordered after farm groups made allegations about a cartel they claimed was operating in the beef industry.
The report predicts that, because of pressure from the World Trade Organisation, farmers could be looking at a price of between 50p and 70p a pound for their cattle - the current price is 97p-100p.
It suggests this would force a return to old-style grass-based beef production. More worrying is the suggestion that more live cattle will be exported for finishing abroad.
Mr John Smith, chief executive of the Irish Meat Association, said the report addressed many of the myths put forward in the past and many of the challenges that would have to be addressed in the years ahead.
Mr Tom Parlon, president of the Irish Farmers' Association, said the report was "useless, and the conclusion at variance with the actual analysis in the area of cattle price. The substantial cattle price secured by the IFA was concrete proof of a cartel and the stranglehold of the factories on Irish cattle prices last autumn."
The report recommends that the status of collective negotiations, as sought by the farm organisations in the dispute that led to the inquiry, should be clarified in the context of company law.
Other recommendations propose:
an annual census of the economic performance of the food and drinks industry in the Republic, as has been carried out in Northern Ireland since 1989;
the promotion of integrated action in the food industry, where farmer, processor and retailer would work in harmony to meet consumer requirements.
The group which undertook the inquiry comprised Mr Kevin Bonner (chairman), former secretary general of the Department of Enterprise, Trade and Employment; Prof Seamus Sheehy of UCD, and economist Mr Colm McCarthy.
