John Comer: Time for real fire-power in milk-price war
Farmers don’t ‘do’ Christmas holidays in the same way as the rest of the population: Farms can’t close down.
But neither do we begrudge the general population their break; it’s been a long and eventful year and the first months of 2016 will see us catapulted into a general election.
In that respect, the Christmas break becomes “the quiet before the storm” after which we have to try and ensure that farm families and related issues receive the proper electoral attention and consideration they merit.
As I said during my address to our recent AGM, it is now abundantly clear that the ‘toolbox’ of policy instruments available to the commission to support milk price in the post-quota era is woefully insufficient.
It’s quite possible that this was also the situation during the quota era but the existence of quotas — this one fixed factor — gave the market some degree of stability.
Now, with quotas gone and farmers’ incomes absolutely ravaged by wild volatility, even the commission has to face the fact that this situation cannot continue.
It’s time to put down the policy pea-shooters and get some real firepower.
The very first thing that needs to happen is an immediate increase in the intervention price for butter and SMP to a realistic level as we begin 2016.
The present intervention price of 20c per litre is simply worse than useless and has zero effect on supporting the market.
That has to be acknowledged and an intervention price of 28c per litre set as quickly as possible.
To those who say that the market must set the price and that the market cannot be wrong, I simply state that the market can be –— and very often is — completely wrong.
A decade ago we allowed the market to set the price for our property.
The market got it wrong and effectively bankrupted our State so completely that it’s now acknowledged that economically we ‘lost a decade’.
So the market can get it wrong and we can’t afford to let it get it wrong again on milk prices.
But then the market has a lot of help getting it wrong on milk price.
There are those who profit from the chaotic swings in milk price and farmer income volatility.
Very powerful elements further along the food supply-chain have a vested interest in these wild swings: The food retail corporations are left unregulated by either governments or the commission and they have been given a licence to operate a ‘win-win’ relationship with farmers and primary producers.
When supply is short, they ‘brick off’ their own margins and hike up the price to the consumer; when supply is abundant they cut the price to processors and farmers and gobble up the extra margins.
These corporations have been allowed to set their own agendas for decades now without so much as a squeak of protest from either government or the EU.
If anyone questions their dominance they retreat behind some platitude about giving ‘cheap food’ to the EU’s consumers and that is deemed to excuse the wreckage they have made of Europe’s family and small farm system.
Perhaps the most positive development out of what was, overall, a positive AGM, was the sense that commissioner Phil Hogan actually is in earnest about finally forcing the retail corporations to divulge the real proportions in terms of margins taken by the different links in the food-supply chain.
Perhaps I can help him with just this one simple observation?
Milk price to farmers all over the EU has fallen by anywhere from 30% to 40%.
How much did it fall in the supermarkets?
Across the EU the milk price paid by consumers fell by an average of 2%.
That small stat tells you a great deal about who benefits from the current system of “no-questions-asked and no-answers-needed”.
I make no apology for returning to this issue, because it goes to the heart of the debate about sustainability.
The Paris Climate Conference was all about ensuring ‘sustainability’; Bord Bia emphasises ‘sustainability’; and every food-related multinational will work ‘sustainability’ into the first paragraph of every corporate press release.
What about our sustainability?
Who’s worried about the threat to sustainability contained in a 35% to 40% fall in dairy farmer income of the sort we saw this year, and which threatens to continue into 2016?
That’s ICMSA’s job.
It’s my job.
And I’m proud to go on doing it.
I’ll end by wishing you and yours a happy and healthy 2016.
