OPINION:OVER THE coming months, important decisions are going to be made here and in Europe that will hugely affect the future direction of agriculture in Ireland.
Tomorrow’s Day of Action will be marked by thousands of farmers gathering in Dublin to deliver the message that achieving the right outcome is essential for the future prospects of Irish agriculture and the agri-food sector.
The expectation is that, next month, the Common Agricultural Policy budget will be agreed as part of the overall EU budget for 2014-2020. It’s worth remembering that the Cap brings €1.6 billion of EU funding into the Irish economy annually.
This is circulated in the rural economy, in particular, through expenditure by farmers on goods and services. For consumers, the Cap delivers sustainably produced food at reasonable prices, which meets the highest environment and animal welfare standards, with guarantees on food safety and traceability.
For farmers, the Cap is a vital income support, underpinning production and providing a mechanism for farm families to deal with increasing price and cost volatility. Farming, the agri-food sector and related inputs and services support 300,000 jobs across the economy, creating output of €24 billion in value annually. Across Europe, farming and the food sector support 40 million jobs.
Only last week, European Commission president José Manuel Barosso highlighted the importance of the “growth-friendly aspects” of the EU budget. I firmly believe that a strong Cap can deliver jobs and growth. The Government recognises the potential of the agri-food sector to contribute to our economic recovery, but to achieve this it must secure a fully-funded Cap budget.
Along with the budget negotiations, we need Minister for Agriculture Simon Coveney to toughen his stance against commission proposals on the distribution of the Cap payments. To put it simply: the commission wants to flatten payments across the country, regardless of land type, enterprise or production levels. This bears no relation to reality. It will undermine production in this country with a negative impact on our output and growth potential.
The Minister is seeking an alternative solution, which he says would limit the negative impact on production. There is a danger of a false sense of security about the level of cuts that the commission is hell bent on achieving. Let me be clear: what European commissioner for agriculture Dacian Ciolos wants to do would be hugely damaging for our sector and the Minister cannot agree to a Cap deal that would derail our plans for expansion.
In parallel with this, discussions on the make-up of December’s budget are taking place. Following two years of growth, farming is experiencing a very difficult year in 2012. A combination of dreadful weather, soaring input costs and falling prices in some commodities is affecting profitability and output at farm level.
Farmers are aware of the tough budgetary decisions that have to be made and that expenditure has to be reduced in all areas. However, since 2008, expenditure in the agriculture budget has been cut by more than 40 per cent, and is now at €970 million, or 2 per cent of total government expenditure.
This compares with an average cut of 10 per cent across all government departments. It is low-income farmers, who are most dependent on farm schemes, who have been most affected by the disproportionate cuts that have been imposed.
Funding for farm schemes must be maintained in budget 2013. Any further reductions would clearly be discriminatory and have a directly negative impact on income and production. Recent years have shown a renewed interest by young people in a career in farming. To build on this, the taxation measures that reward enterprise, support farm transfer, investment, land mobility and consolidation must be retained and progressed.
Overall, expenditure and taxation decisions taken in budget 2013 must support economic growth and protect the lowest income sectors.
There is another important reason farmers are in Dublin tomorrow. Retailers continue to take an excessive margin, at the expense of primary producers. Some of our sectors are facing much higher costs this winter, and yet the retailers are refusing to pass back a price that reflects this. Farmers need to see a real commitment from the multiples to the producers they claim to value. Whether they like it or not, retailers have a responsibility to the people who put quality produce on their shelves every day of the year. They will have to shoulder some of the increased costs, and can afford to do so.
We are still waiting for regulation of the retail sector. At national and European level, we need a statutory code of practice, backed up by an independent ombudsman. Only then will we see a level of transparency and fair play in the food chain.
The coming months will be crucial. Ireland produces enough food for 35 million people and can sustainably increase production to cater for 50 million. With the right policies, farming and food can be at the heart of the recovery, particularly across rural Ireland.
John Bryan is president of the Irish Farmers’ Association