EU intervention unlikely as seven states see no need for pig support

13 member states wanted market measures but major producing countries, such as Germany, Spain, Italy, Denmark, the Netherlands, Sweden and Finland did not support the call

Following an emergency meeting of pig producers from across the country, IFA President Tim Cullinan told the Minister for Agriculture Charlie McConalogue he must come forward immediately with details of a support package for pig farmers.

With seven member states which produce almost two-thirds of the EU pigs not asking for EU market measures to support under-pressure pig farmers, reliance on state aid from the national purse has emerged as the best hope for ending what IFA President Tim Cullinan said last week is the most severe income crisis in nearly 20 years for pig farmers.

After an emergency meeting in Dublin attended by over 150 farmers, Mr Cullinan said Agriculture Minister Charlie McConalogue committed to providing Government support in the form of direct aid for pig farmers.

The IFA President, himself a pig farmer, said there is no time to waste, with the latest pig price cut and increasing feed costs leaving a loss of over €35 for every pig produced on Irish farms. 

“Currently, a pig farmer with 500 sows is racking up losses of €10,000 per week,” said IFA Pigs Chairman Roy Gallie.

Earlier this month, EU Agriculture Commissioner Janusz Wojciechowski said 13 member states wanted market measures but major producing countries, such as Germany, Spain, Italy, Denmark, the Netherlands, Sweden and Finland did not support a call for market measures.

“I think this is a clear signal, and a signal I cannot ignore.” 

He pointed instead to state aid, such as last week’s announcement by the French Agriculture Minister of a €270m emergency package for the country’s pig producers.

Commissioner Wojciechowski said this would amount to €2.7bn, six times higher than the CAP crisis reserve, if other member states followed the French example and scaled state aid up to EU level.

Poland has also announced a state aid package for pig farmers, of €88m.

The Commissioner said EU exceptional market support measures to cover losses linked to movement restrictions, and severe imbalances in markets, were always available, but have been ignored by member states.

As for the measure against market disturbances which 13 member states asked for, it would realistically have to be financed from the agricultural crisis reserve of €497.3m, which not only needs the approval of the European Parliament and the Council, but would ultimately be financed by farmers, because crisis reserve spending could not be reimbursed to them in 2023.

And with seven member states against the measure against market disturbances, they might have a blocking minority in the EU Council.

“Besides, €497.3m for 1.5m pig producers in the EU is not a lot, compared to what France and Poland are offering,” said Commissioner Wojciechowski.

Minister McConalogue has said he has sought rapid deployment from the European Commission of appropriate solutions to Irish pigmeat difficulties such as increases in fuel, fertiliser, feed and energy prices, and pigmeat market disruption.

He said the development of the pigmeat sector is a priority for him, given its pivotal role in the national economic context, supporting about 8,000 jobs.

With Minister of State Heydon, he met bankers to discuss their financial support for pig farmers, and the feed industry, to determine what it can do for farmers.

He said the Brexit impact loan scheme and Covid-19 credit guarantee scheme can be used for working capital, and include features that address the financial challenges to pig farmers.

He and his Department continue to monitor the situation, and to examine possible measures to assist in supporting farmers through an unprecedented, very challenging time.

Globally, rising shipping rates, energy prices, feed grain prices, and labour costs, are challenging pork supply chains while, in slowing economies, producers and processors are finding it difficult to pass on all additional costs to consumers.

Reductions in China’s import demand, as local production recovers, leave major export regions needing to find a new balance between supply and demand.

Oversupply in Europe maintains downward pressure on prices. African Swine Fever spreading to northern Italy could complicate the pig trade even further.

Omicron-induced strict measures on human movement also helped to soften the pork market entering 2022. 

However, long-range forecasts anticipated the effect of reduced EU supply and increased Chinese demand being felt in the market from April onwards.

And there were also hopes of high feed ingredient prices easing in the late spring and early summer, returning profitability to the pig sector.