Better returns, not another report
In July 2000, Enterprise Ireland identified price transparency and trust among farmers and processors as a key objective.
Well, the Seamus Sheehy report into the sector, which concluded there was no cartel, may have satisfied processors, but it failed to lift the cloud of suspicion hanging over it as far as farmers were concerned.
The Grouch Marks comment: “Just because I’m paranoid doesn’t mean they’re not out to get me”, springs to mind.
In fact, since the Sheehy report, farmers have remained distrustful of the sector and the hostilities between the IFA and the factories, though temporarily suspended, could re-emerge.
In the long term, despair about those involved in beef ever seeing eye to eye looks more like the norm. Pressure on beef prices, and the unstable nature of the global market, with so much at stake for both sides, suggests that suspicion is destined to be the hallmark of the industry, barring a miracle.
At the most basic level, farmers are convinced that the Sheehy report missed the point, not deliberately or maliciously, but that it, nevertheless, missed the point.
There was never a suggestion that the highly-respected professor was anything but objective in his findings.
The report concluded that because processors were making so little money, they could not operate a cartel when it was clearly not in their interests from a financial perspective.
Margins of about 2% suggest that, if anything, the processors were also victims of whatever ruse is being used to keep prices to farmers and processors unjustifiably low.
Farmers suggest that perhaps the report looked at the wrong set of statistics. They continue to ask why it is that the price paid by the consumer in the supermarket is so high compared to the rate paid to the primary producer, or indeed, the margin enjoyed by the processors.
Is it the case that farmers and processors are being screwed by the multiples because they have a major hold over the processors in this country?
Experience has shown that those in other sectors have had margins eroded to a bare minimum because of their failure to stand up to the multiples.
Are they left with no choice but to use the same heavy-handed tactic against farmers in order to stay in business themselves?
This is a question that has been asked before and perhaps it ought to be investigated again, this time viewing both farmer and the processor as victims in this business.
If the producer and processor are living with rock-bottom prices for beef, why is the consumer paying though the nose for the meat they buy in supermarkets and elsewhere?
Last week, John O’Leary, Irish Creamery Milk Suppliers Association beef and cattle committee chairman, raised the issue of trust and transparency, adding his doubting voice to that of the IFA’s.
His concern was the gap between the price in cattle aged over and under 30 months, and the drop in the price of beef cows.
He said this was unacceptable and could not be justified.
He agreed with Agriculture, Food and Rural Development Minister Joe Walsh that a major re-examination of the beef sector was required.
But farmers do not need another report, they had the Beef Task Force Report and nothing came from it.
The key to any re-examination is improved returns for beef farmers and to restore the economics of beef production, Mr Walsh said.
His concern for the economics of the sector is understandable, but it seems that the primary producer and the processors have a common interest to have the economics of beef production restored.
But does anybody really want to know?
