IFA warn of SFP grain slump
IFA grain spokesman Paddy Harrington called on the trade to pay at least last year's €101 to €104/tonne for green barley at 20% moisture, exclusive of VAT. He said the Irish cereal industry is at a major crossroads, because many tillage farmers will restructure their new decoupled single farm payment onto a reduced area, giving up the 35% to 40% of cereal production which they do on conacre or leased ground.
"Continuing attempts by the trade to force down cereal prices below the cost of production will do irreparable damage to the industry", he said. "If the price outlook for cereals remains negative, many growers will not plant a crop for the 2005 harvest."
However, Mr Harrington said while traders attempted unsuccessfully to talk down barley prices €4 or €5, new crop dried barley has hardened to €120 to €124, and some forward business was done at €128 to €130 for December.
"Growers will no longer continue to subsidise the growing of grain", said Mr Harrington, "from their area aid payments, the growing of high margin crops such as sugar beet and potatoes, or from contracting".
"In the decoupled scenario, allied with a proposed major reform of the sugar sector, tillage farmers will examine the profitability of grain production as a separate stand alone business, and if it is not profitable, they now have the option to walk away from it."
Teagasc last week advised that the single farm payment should not be used to support an unprofitable crop.
With decoupling, pay more attention to crop gross margins, and be aware of fixed costs, is the Teagasc advice.
The decoupled SFP will be introduced five months from now, but growers will have to make cropping decisions for 2005 in less than six weeks.
Farmers will have more flexibility in choice of type of farming and enterprise.
Setaside rules will be largely similar to the rules under Area Aid, but setaside can only be placed on arable land. This includes fields in tillage or setaside since 1998.
The Department of Agriculture and Food will send a provisional statement to each farmer in September with details of the number and value of their Single Farm Payment entitlements.
Consolidation (stacking) of entitlements will allow farmers to draw their full entitlements on 50% or more of their area farmed from 2000 to 2002. It applies to land afforested, sold under CPO, or leases of land not renewed.
Farmers will be able to sell entitlements with or without land. Entitlements can only be sold without land after 80% have been activated in one calendar year.
Entitlements can only be leased out if accompanied by an equivalent number of eligible hectares.
