CAP reform will force beef plant closures, says expert

SIGNIFICANT closure of Irish beef plants is on the cards following the swinging CAP reform proposals announced in Brussels on Wednesday, a leading expert has predicted.
CAP reform will force beef plant closures, says expert

In the past five years the number of processors has increased from 37 to 45 in this country, despite efforts by Enterprise Ireland and the industry to streamline the sector in the interest of profitability.

However, the Fischler plan is likely to shake up the industry, Brian Britton, managing director of Britton Consultants, warned yesterday.

Mr Britton is best known as financial director of the Goodman Group but he has been an independent consultant to the sector since 1991.

With the switch from direct payments to the farm-based system, Britton forecasts that the long-awaited reform will kick in rapidly if the new system is introduced in 2004.

“People move when they start to hurt,” he said.

He warned also that the changes foreshadowed by the Fischler reform plan point to a whole new era of agriculture in the EU.

Others suggest beef production is set to fall by as much as 30%, as the farm-based plan will make it unprofitable and unnecessary to produce in order to ensure the cheque in the post from Brussels.

Mr Britton said the plan suggests the first steps towards a level playing field for agriculture and we should plan now for that day, which will come about far sooner than many in the sector realize.

In his view, agriculture should be no different to any other sector of the economy, all of which have to compete head to head in whatever market they find themselves operating.

He said it was inevitable that the EU would ultimately move towards a market-driven system of agriculture and the CAP initiatives are the first step in that direction.

To survive, he said, “We will have to add value to what we produce if farmers are to continue to have a livelihood on the land.”

The full implications of the CAP reform will not become clear until the Commission files the legal documents required to implement the radical proposals in the autumn.

But it is already becoming clear that the value of some farms will be seriously undermined by the shift from the production-based priced support system. Farm values will be determined by how the payments system is decided on by the Commission.

And when farmers come to sell on their land, its value will be enhanced or undermined depending on how much income the farm has been allocated under the new CAP regime.

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