Why is society silent on low farm incomes while IFA salaries are sensationalised?

The controversy over the pay levels in the IFA has dominated news headlines in a remarkable way over the past few weeks.
Why is society silent on low farm incomes while IFA salaries are sensationalised?

For quite some time now, mainstream news channels have been most reluctant to cover key issues facing agriculture, and specifically, the most critical issue of all, pay.

But for all the sensationalism, I am not talking about the pay in IFA but the far more important issue of low pay from farming.

This fact seems to be lost on the national media who have shown little interest in the topic in recent years.

Admittedly, the headline figures look good.

Agri-food exports remained resilient throughout the financial crisis and surpassed €10bn in recent years.

Having been ignored during the Celtic Tiger era, suddenly agriculture was being proclaimed as a saviour.

The truth, rather more prosaic, was that agriculture has always been an important part of the overall economic picture but that the viability of family farms is increasingly under threat.

This seeming paradox is explained by the reality that as farming becomes more complex, intensive, and high cost, many spin off benefits accrue and are dispersed throughout the length and breadth of rural Ireland.

However, the ongoing squeeze on margins by greedy processors and retailers means it is harder and harder for family farms to make a worthwhile income.

Nevertheless, family farms have been incredibly resilient in surviving. How long this can continue is a critical debate that needs to be opened up.

It seems to me that the key agencies linked to supporting agriculture such as Teagasc and Bord Bia, along with the minister and his department have been inclined to avert their gaze from some inconvenient truths regarding pay levels for farmers.

While the national strategy seems to be focused on substantial expansion of output, particularly in dairying, there has been a dangerous collusion in self-delusion.

There is the difficulty that extra output generally leads to falling prices. Basic economic principles of supply and demand if you like.

We have long seen this in the beef sector where a weekly kill of greater than 30,000 cattle invariably leads to price slippage.

Yet nonetheless, both Teagasc and the minister seem transfixed by the notion that farmers need to increase output to combat weak incomes.

On an individual basis, this may be true, although the cost of expansion is often under-estimated.

However, the benefits can only accrue to the individual expanding provided that the masses don’t follow suit.

Anybody who has ever attended a mart, however, will know that market sentiment is a stampede.

An ever bigger flaw in the whole house of cards is this failure to properly account for labour and land costs.

I have previously written about how farmers rarely count their own labour as a cost and worse still, expect that family will willingly contribute many hours of unpaid labour.

The off-farm income of the spouse, and often times of the farmer, is used to prop up lack of farm profitability.

Some farmers don’t notice that if they are not contributing half of household expenses, then in effect they are living off their spouses.

When we see Teagasc Profit Monitors and the Teagasc National Farm Survey, it is notable that own and family labour and owned land costs are ignored.

This is problematic in that farmers are overstating their profitability; it is dangerous in that retailers are encouraged to squeeze more on the miscalculation that farm incomes are all right.

Another problem with this is that many expansion plans fail to understand the true cost of land and labour.

When a farmer goes from milking 100 to 150 cows, how does he calculate the additional labour costs if he has been in the habit of ignoring it up to now?

ICSA is convinced that the issue of properly accounting for all costs needs to become the debate of the next few years so that we are not led up the garden path of expansion for expansion’s sake.

As a lobbying association, fighting for better prices for farmers cannot be easily done if there is misinformation about real profit figures on Irish family farms.

Meat factories have played the “if farmers were more efficient” card at the Beef Forum. Doesn’t take a genius to see through meat factories advocating more cattle!

The recent difficulties with IFA have seen a spotlight shone on their collection of levies from farmers’ sales of livestock and produce. ICSA gets no levies.

This means that the association has no “skin in the game” when it comes to expansion.

If farmers can make more money producing more output, then fine but ICSA has no interest or benefit in extra output.

Where extra output does nothing for farm incomes, then we need farm associations that will be very forthright about calling it as it is and forcing Government and EU to confront the reality of low pay for most farmers.

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