Irish food production 'hurtling' towards breakdown as costs rise

ICMSA has issued a warning to the Government regarding rising fertiliser and fuel costs, saying the situation is 'running away on us all'

ICMSA has warned that rising fuel and fertiliser costs could force food production in Ireland to break down.

Soaring costs have triggered alarm across the agri sector, with the Irish Creamery Milk Suppliers Association (ICMSA) warning the Government the crisis is spiralling out of control.

As prices surge in both fuel and fertiliser, causing widespread panic throughout the agri sector, ICMSA president Denis Drennan has warned the Government “the situation is running away on us all”. 

The Government has passed measures to lower petrol by 15c per litre and diesel by 20c per litre until the end of May. Green diesel will also be reduced by 3c per litre, and the Nora levy reduced by 2c per litre to zero next week once it is passed.

Mr Drennan said “right behind” the immediate problem of purchasing fertilisers for this summer’s grass and rocketing energy and fuel prices was the reality farmers were already "ground down" by falling or stagnant dairy and beef prices.

“Farmers sourcing inputs and services are seeing prices surge and are being particularly ‘hammered’ by the surge in green diesel price, which is well above that of white diesel.

"The question has now become how farmers are meant to keep going when their day-to-day running costs and inputs have gone up proportionally and when their prices — whether for dairy or beef — are stagnant or slumping — demonstrably and substantially below prices this time last year?” 

ICMSA is not sure that the Government appreciates just how close we are to primary food production just ‘seizing up’, where farmers cannot afford to farm because the prices they are receiving are coming nowhere near what it is costing them to keep farming.

There’s no point in being melodramatic here, but Minister Heydon and his Cabinet colleagues must understand that we are coming up to that point very, very rapidly indeed”, said Mr Drennan.

The ICMSA president called the 5c per litre reduction in excise introduced last week “hilariously inadequate” and said the Government must “brace itself” and look again at the 17c per litre that goes on the carbon tax.

"Carbon tax makes up 17c of the 22c tax on agri diesel. In the last two years, the carbon tax has increased by almost 5c per litre and is due to go up again by 2.3c on May 1.

“We need the Government to understand that just crossing your fingers and hoping for the war to end and sanity to prevail is just not a policy. Farmers have been producing food at a loss, which was the situation even before the outbreak of war, and it has now got substantially worse.

"Now we are in a situation where we are still making no income, but our costs are multiplying on a weekly basis. Something has got to give here, and we are warning the Irish Government that unless meaningful reductions are made to the current costs of producing food, then we are hurtling towards a breakdown of our flagship farming and primary food production sector,” added Mr Drennan.