300 jobs could be lost in mushroom sector
“We could lose a further 300 jobs,” warned Micheál McGovern, chairman of Commercial Mushroom Producers (CMP) Co-operative Limited.
Industry representatives told the Joint Oireachtas Committee on Agriculture last week that mushroom contracts with UK retailers are agreed in sterling, usually for up to 12 months ahead.
But the Brexit-associated weakness of sterling has left growers getting a return of only €1.16 per £1 sterling, compared to €1.36 a year ago.
As a result, the first 100 days of Brexit saw three farms closing, with the loss of 130 jobs and €7 million in exports.
“Since the UK vote to leave the EU on June 23, the mushroom industry in Ireland has been thrown into turmoil and growers are in loss-making territory, resulting from the sudden and significant weakening of sterling,” the Committee was told by Gerry Reilly, chairman of IFA’s horticulture committee, who is the vice chairman of CMP.
He said Irish mushroom marketing companies are battling with UK retailers to get new contracts, but it is “a very slow and painful process”.
“Unfortunately, there are many European and Eastern European producers ready to supply the UK, and there are no guarantees of getting the prices up.”
“There is no viable alternative market for such a highly perishable fresh product, and currently the UK is our only market.
“We send more than 50 articulated lorry loads to the UK, seven days per week, 365 days per year. That amounts to 50 40-foot lorries going out of Ireland every day.”
Ronnie Wilson of Monaghan Mushrooms told the Committee, “We are purchasing mushrooms in Poland and Holland to service our UK contracts. We can continue to do that for a little while, but not for very long.”
Meanwhile, as a result of the closure of the Russian market, mushrooms from eastern Europe, produced at much lower cost, are entering the UK retail market and displacing Irish produce.
“A significant and longer term market pressure for Irish producers is the foothold that has been gained in the UK retail market by Polish product in recent times. This is worrying as their cost base is only a fraction of ours. For example, their labour rate is 28% of our minimum wage in Ireland,” said Mr Reilly.
On the domestic market, growers supplying Irish retailers with 14,000 tonnes annually now find themselves competing with growers whose produce would normally be destined for the UK.
About 3,500 are employed on Ireland’s 60 mushroom farms.
Leslie Codd, marketing manager at Codd Mushrooms Limited, said: “There has been a reduction of probably 17% to 18% in price within the space of a number of weeks. Mushroom growers exist on a very low margin.
“We are now at a point where we see very little hope without Government assistance.”
Mr McGovern told the Committee about €2m of producer organisation funding for 2015 is due to growers, and urged the Government to make the payment as soon as possible
Agriculture Minister Michael Creed has revealed that his Department is being sued by the mushroom producer organisations, and said producer organisation accounts for the relevant year had been submitted only in recent weeks, and environmental actions must be taken before the Department can verify accounts.
