ICMSA president says existing Brexit losses must be first in line to be addressed

Pat McCormack, ICMSA President pictured at the ICMSA AGM which took place at the South Court Hotel, Limerick. Pic: Don Moloney

I met EU Agriculture Commissioner Phil Hogan last Thursday in Brussels to discuss the ongoing uncertainty over Brexit and the crippling effect the chaos is having on Ireland’s farming and wider agri-food sector and the financial losses being suffered by farmers.

I told him the whole sector had been in a state of suspended amination for going on three years since the Brexit referendum put a massive question mark over our traditional markets in the UK.

I went on to say, as categorically as possible, that it is the primary producer — the farmer — who is taking the financial hit.

I explained how our members have been unable to make the kinds of decisions that are urgently required for a forward-planning business such as farming because we just don’t know whether our multi-billion British market for beef and dairy is going to be feasible the other side of Brexit.

Obviously, as the State’s specialist dairy farmer organisation, the milk price being paid to farmers is ICMSA’s first order of business. But a huge, and growing, volume of Irish beef output is coming from the dairy herd and we are very focussed on the systemic problems that, yet again, seem to work against the farmer primary-producer getting any kind of viable return on their production which is the basis of the whole multi-billion euro sector.

A very interesting example of this in-built bias against farmers is the recent arrival in Ireland of the ‘feedlot’ phenomenon, where cattle are held on facilities owned by beef processors and strategically fed back into the supply numbers in volumes that effectively manage the cattle numbers going into the factories.

The factories always control the supply of cattle and therefore always control the price. The Department of Agriculture, Food, and the Marine just recently published figures which show that 54,000 cattle originating from feedlots (as defined by the Department of Agriculture, Food & Marine) were slaughtered in January and February this year. Immediately after those figures were published, I called on the department to commission an independent study regarding the influence of feedlots on the price paid for farmers cattle.

Based on the department’s data, those 54,000 cattle represent over 17% of the total kill for those months and this percentage does not include cattle contracted by meat plants.

This figure can only be described as extremely significant and ordinary farmers are justifiably questioning the influence these feedlots had on cattle prices in the months concerned which saw farmers getting substantially reduced prices on the previous year and consequently suffering major losses.

In 2017 and 2018 respectively, 263,000 and 295,000 cattle were slaughtered from department-designated feedlots, and there can be no doubt that such figures will have a significant downward influence on beef prices at particular times of the year.

At this stage, we think that an independent review is required, Agriculture Minister Michael Creed should commission it and publish it as quickly as possible — and he should consider an interim report if necessary. We badly need to ascertain the full facts here because it’s looking increasingly likely that the numbers off feedlots are being used strategically to dictate wider cattle prices and that puts a question mark over their purpose as far as ICMSA is concerned. We’d also be looking very closely at the numbers quoted as coming off feedlots which seem a little vague to us.

Agriculture Minister Michael Creed

We welcomed the announcement by ministers Heather Humphreys, Mr Creed, and Pascal Donohue of the Brexit Loan Scheme last Wednesday, but we were struck by the almost complete lack of specifics and details on the farmer element of this scheme.

That lack of clarity on the loan package was being compounded by the original SME Brexit Loan scheme (which excluded primary agri producers) being the only information available on the SCBI website: If a farmer wants to consider applying, there is no obvious procedure to which he or she can refer or follow.

Our second reaction is that the minimum amount of €50,0000 will actually be in excess of many requirements, we appreciate that there must be a cut-off at a particular point, but we would lower the amount to €20,000. We’d also be very disappointed at the decision to permit an interest rate of 4.5%, given that the previous scheme had money available at 2.95% — a rate that is itself higher than would ordinarily be charged in similar circumstances in other European states.

This is an option and we’re happy to acknowledge that, as well as the fact that security will not have to be offered for the loan application to be considered.

There’s no doubt but that significant numbers of farmers will need to access these loans.

As I observed to Mr Hogan, we’re well past the question of whether or not Brexit will cost Irish farmers money; it already has cost us money, and continues to do so every day. It is now a question of how and when the European Commission and our Government set out supports to restore confidence among farmers regarding their futures.

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