Single farm payment ‘needs to be maintained at current levels’

THE turbulent times in farming are set to continue and only the fittest will survive, Connacht Gold chief executive Aaron Forde told about 800 people at a forum on farming hosted by the co-op in Claremorris, Co Mayo.

“Without the protection of the traditional European Union tools of intervention and refunds, we are exposed to the volatility of world markets, changes in supply/demand balance, currency fluctuations and climate or food scare events. Therefore, the only way we can protect ourselves as businesses and farmers is by having a relentless focus on doing things better,” he said.

Mr Forde said in the United States and other regions forward contracts and hedging instruments act as buffers for farmers against price volatility. Irish and European farmers have no such mechanisms.

“Therefore, it is vital that in the forthcoming EU negotiations the single farm payment is maintained at its current level so that farmers have some insulation against fluctuations in prices,” he said. Mr Forde said with more than 10,000 farmers in the five Connacht counties being forced out of REPS over the next two years, the region will suffer a drain of €60 million a year. “It is vital this income gap is bridged through an effective REPS replacement scheme, which at present looks to be seriously inadequate.”

Dealing with the dairy sector, Mr Forde said milk processors nationally had invested €200m in price support over the last two years. While the structure for milk processing is not ideal, any savings made in processing costs will require investment. There are no easy answers and the industry needs to move carefully, he said.

Friends First chief economist Jim Power said in spite of difficult markets and the predatory behaviour of sections of the retail sector, the agri-food industry still has tremendous potential.

But policy makers must wake up to the reality of the massive contribution the industry can make to Ireland’s radically and permanently changed economic landscape. “The key contribution that policy makers can make is to continue to push the competitiveness agenda.

“The reality is that the cost of doing business in Ireland is still way out of line with the main international competitors,” he said.