‘Brazilian treatment’ hurts
Brazilian sugar workers get €77 per month.
As for land prices, Brazil is one of the few countries with its own word for the grabbing of land by fraud and violence, the “grilagem” which has enabled the “grileiros”, the loggers, ranchers and businessmen backed by private militias and gunmen, to get nearly half of the country’s land into the hands of just 1% of the population.
They will be the new competitors for Irish farmers, in our economy with a €7.65 per hour minimum wage, and an average farmland price of €18,442 per hectare, one of the highest in Europe. Irish farmers are still making money from farming, as more and more non-EU agricultural produce is allowed in, thanks to the Common Agricultural Policy, which costs Brussels about €45 billion per year, or 40% of the EU budget.
If the EU doesn’t pay to keep people on the land national governments would have to do it, or else abandon farmers who cannot compete with competitors in less developed economies, who are mostly unfettered by environmental and other laws.
Developed countries spend a total of about €215 billion per year to provide some economic certainty for their farmers, and ensure domestic production of some agricultural goods.
However, in the same week that the sugar industry is mothballed by Brussels, UK Prime Minister Tony Blair wants to dip into the Common Agricultural Policy in return for ending the UK’s 21 year old EU “reduced EU membership fee” rebate.
At present the European Commission has tried to revive the EU budget negotiations which Blair vetoes by putting a 4% cut in all those CAP cheques from Brussels on the table.
That would come on top of the 8% cuts agreed as part of the new Single Payment system of getting financial support from Brussels to farmers.
Meanwhile, Irish dairy farmers have seen their milk prices cut by 40% since 2001, as Brussels pulls back their share of CAP support, leaving farmers here with the same milk price they got in 1988.
Cattle farmers are making small profits from the marketplace, because EU consumers are eating 380,000 tonnes more beef than can be produced in the EU. But about three quarters of their income comes in the threatened Single Payment cheque from the EU, rather than the beef factory.
Farmers are suffering as Brussels brings the EU in line with World Trade Organisation rules on fair world trade in farm products, tries to make the EU farm and food industries more competitive, and absorbs farmers in the new member countries.
Unfortunately, the high costs of doing farm business in Ireland leave farmers here in a particularly vulnerable position.
Farmers in Sweden, for example, can buy up farmland for about one-sixth of the Irish price, and thus expand production, to become more competitive.
Farmers here can’t do that, but are still suffering EU cutbacks. They could do a “state of the nation” appraisal of their worrying situation, from Agriculture and Food Minister Mary Coughlan.
She was all positive recently in highlighting agri-food’s 9% of gross domestic product and employment, and more than 8% of exports.
She also pointed out that an annual cheque from the EU for €1.6 billion makes up 74% of the Irish farmer’s wages.
Can Irish farmers continue to depend on that cheque?
Should they take advantage of one of the highest farmland prices in the EU, which prevents farm expansion here, by selling out, or borrowing against this grossly inflated asset, and investing outside of farming?
As soon as the EU budget negotiation and sugar reform dust settles, Minister Coughlan must spell out how farmers can best continue their contribution to their economy.
