Chilling beef news from Brazil
She may have been thinking of beef, one of Ireland’s main agricultural exports, but now increasingly likely to come into Europe from Brazil, which can export as much in two months as Ireland can in 12 months.
“Globalisation is with us and seems to be moving forwards with unstoppable momentum”, said Ms Fischer-Boel - chilling words for Irish cattle farmers, as beef supplies from more than 5,000 miles away drive down prices on the EU market.
She has also said EU farmers’ production choices should be directed by what the market wants rather than by subsidies.
The market wants more and more Brazilian beef, coming in cheaper than Irish product, even after paying EU duties.
This year’s figures show some of Ireland’s best beef customers turning to South American beef - a 190% increase in exports to Russia, up 48% in the UK and up 45% in Italy.
Egypt, once an Irish customer, now takes 17,920 tons of Brazilian beef per month.
The Netherlands is another big buyer.
There’s plenty more beef in Brazil.
Now declared free of foot and mouth disease due to vaccination, the state of Acre in the north of Brazil has just joined 15 other states internationally approved for beef exports.
Acre has two million cattle, and will produce 300,000 slaughter animals this year.
And with the EU a net beef importer since 2003, there is huge demand here for Acre’s “green” beef, from grazed, unconfined cattle (or so the Brazilians say).
Imports are good business for Germany, for example, where about 30% of beef processing plants have been operating at only 80% of their capacity, because of the EU’s falling beef supply.
Imports will be even better business in 2007, when decoupling will have been implemented by all member states, and the full effect of the Single Payment on EU cattle production kicks in.
Financial necessity has driven EU processors to find cheaper beef supplies - even if they come from unreliable sources.
During 2004 there were two outbreaks of foot and mouth in Brazil, one of which led their primary beef customer, Russia, to ban most imports.
In 2002, Argentina left its EU beef customers high and dry, when one of the most devastating financial crises in history triggered economic chaos.
Brazil’s economic history, too, has been characterised by booms and busts. Its currency recently slumped 4.34% in a week, due to a political corruption scandal which famously involved a member of President da Silva’s administration trying to board a plane with $100,000 hidden in his underpants.
Da Silva’s political future, and the three-year economic recovery he has led, are uncertain, after 46 politicians and aides were found to have received $12 million in bribes.
Already, Brazilian beef exporters have said they will have to reduce sales due to their deteriorating exchange rate.
However, the country’s good balance of payments, low inflation and booming exports, have reassured the world markets, which are betting on the weakened government being able to sustain its successful economic policies.
The question for Agriculture Commissioner Fischer-Boel is whether Brazil can maintain the safe and reliable supply of food which she says is as important now as it was when the Common Agricultural Policy was drawn up after World War Two.
If Brazilian beef imports continue at their current rate there will be few EU cattle farmers left to pick up the slack if Brazilian beef dries up without warning due to another South American cattle disease or economic shock.
