Stephen Cadogan: Luck of the Irish has saved us from worst of EU crisis
However, farmers in most other EU member states are hurting the most, and need early relief measures from the EU — offering the prospect of a rising tide that will lift Irish boats also.
Announcing that he will join the European farmer demonstration in Brussels on September 7, IFA President Eddie Downey said current loss-making prices across farm sectors are not sustainable, and cannot be allowed continue.
But in an apparent reference to the even more dire straits of many continental and UK farmers, he noted that hard-pressed producers with large domestic populations and markets were intensifying their campaigns over loss-making prices, but they should not do so at the expense of farming colleagues in other member states, and of the single market.
He said the EU Council of Ministers must take action to defend the single market — fearful no doubt that things could get so bad for continental and UK farmers that they will take militant action against imported produce — which could hurt Ireland badly.
A number of circumstances have brought about a relatively rare situation of Irish farmers escaping the worst of the recent setbacks for EU farmers.
At the root of much of the trouble is a Russian boycott of EU food exports, which has hit farmers worst in continental countries, especially in the Baltic region, and had a severe impact on fruit and vegetables farms, not an export sector for Ireland.
Meanwhile, Ireland’s biggest sector in terms of number of farmers, the beef business, has been boosted by its huge export trade with the UK, and by currency exchange trends.
Lastly, Ireland’s cost advantage due to grass-based production of beef and milk must not be forgotten.
While many EU dairy farmers have endured many months of loss-making production, Ireland’s rock-bottom costs have kept the wolf from the door.
However, Irish production conditions haven’t saved Northern Ireland’s dairy farmers, hit by the worst of the milk price drop across the UK.
South of the border, tillage farmers here have come under pressure.
And more than any others, our pig farmers know the pain being felt by EU colleagues — even though their counterparts next door in the UK enjoy prices 20-30% higher than Irish prices, thanks mainly to a buy-British retail policy.
That anomaly is typical of the varying fortunes of farmers across the member states. Despite the CAP and the single market, 2015 has seen huge farmer unrest across the continent due to reduced prices, while Irish farmers are still only at the belt-tightening stage.
Irish farmers can turn that to their advantage. IFA sees it as an opportunity to persuade EU leaders not just to lift farm incomes across the EU, but also to hammer home demands for equity in the food supply chain, from EU retailers who are more than capable of paying viable prices back to processors and to farm level.
Meanwhile, market forces will inevitably also have their effect, especially in the dairy sector, where small changes in export supply and demand can have major price impact.
There could be major market effects from the response to low prices of New Zealand farmers. Their industry group, DairyNZ, predicts nine out of 10 farmers will need to take on extra debt to keep going, and it will take some farmers many years to recover from the current low milk prices.
As they face into the calving season and the New Zealand peak milk period from October to December, milk prices are only half of the 2013/14 price. It’s the lowest milk price since 2002, and since then farm costs have risen and average debt levels have doubled, leaving the average NZ dairy farmer facing a 2015-16 business loss of €160,000.
That situation alone will ensure a halt to the global milk output increase of recent years.
