Beef pricing system must be overhauled for transparency

Bord Bia’s graph shows August prices rising in France, Italy and the UK, but slumping in Ireland.

“Crisis beef summit” thundered the front page headline last week in a well-known Irish farming newspaper.

Apparently farmers in Britain are now getting upwards of €300 a head more for their beef than we are here, a price gap which IFA president John Bryan described as a “scandal”.

The report indicated that the IFA would be holding a special meeting of its livestock committee and executive council sometime this week, to decide on what “course of action farmers will take to defend their livelihoods”.

It’s about time.

I pointed out these exact same concerns about falling factory prices on July 19 in my mart report on this page, when I said farmers were already very angry that “the processing sector can effectively, and with apparent immunity threaten the viability of the entire industry”, despite the UK market remaining strong.

And did I not also say at that time that, “What farmers can and should do about it is complicated, in my opinion, because factories collect levies for certain farm organisations.”

It is difficult for me as a beef producer to believe the levies situation does not in some way impact on the ability of the main farm organisation to really get at the meat in the sandwich. Look at it this way: if you borrow a farm loan from a bank, and things get tricky with repayments, are you really going to tell them I won’t pay anything — in the knowledge that to do so could see your other credit facilities possibly frozen?

The reality is that the factories have taken full advantage of the bad weather, to pull prices.

And farmers are left with no real say in the price at the factory gate — because the farm organisations failed to tie their acceptance of the QPS system a number of years ago to a forum where factories and farmers could sit down on a regular basis to resolve their differences on pricing and market conditions.

John Bryan apparently believes that the opening up of the Libyan market might help restore competition. Yes it might, but for which type of animals?

Is the reality not very simple — we need an independent body to oversee the entire pricing system, a body that can report to the minister on the state of the business at farm gate, factory line and supermarket shelf.

In this column last February, I reported that the Government of the United States employs a system that takes on board farm, factory and retail prices, which tells farmers what their animals are worth, once they have gone through the system and are presented for sale on a supermarket shelf.

The price paid at each stage, and the percentage of the final value each party gets, are made clear.

What we may get in the next few weeks will probably be public meetings where farmers will meet to air their grievances.

Meetings where the ordinary farmer will be told by our farm leaders that it’s a “scandal” and that we shouldn’t stand for it.

These meetings, if they happen, will be well attended and well reported, and at the end of each one, many will nod sagely and say to their friends and colleagues as they leave “we told ’em”.

They will, like many before, be well orchestrated PR exercises in the letting-off of steam.

I hope I’m wrong about that.

I want to believe that farmer representatives will someday turn around and call on the minister to institute a full investigation into the system used by factories to calculate prices and market returns to producers.


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