Harvest fears spark CAP opportunity

Two weeks ago I mentioned the effect the weather was having on my wheat and barley crops.

At the time, I predicted that my losses might be limited to maybe no more than six acres — and that might be acceptable, given the year we’ve had.

That assessment, I fear, was overly optimistic.

As the weather improved, I began to see far more clearly the effect five weeks of more or less continuous rain had on the plants.

Out of a combined total of 70 acres, I reckon upwards of ten acres is now lost, the roots having been drowned.

The wheat has fared worst, due to the nature of the ground I chose to plant it in being naturally heavy — not an overly bad thing in a normal summer, and an advantage in a drier summer. However, the summer of 2012 has been anything but normal.

Just to make it more interesting, for long periods of the late spring and early summer contract prices for wheat hovered between €150 and €165 a tonne, 30 above early expectations.

So, like many, I took the plunge, and committed myself to contracts that averaged just over €160.

I remember getting weekly txt messages in May and early June that showed how I was either a fiver above or below the expected harvest price, from week to week.

Since then, however, as the situation around the world has become clearer, prices have rocketed, with wheat off the combine hitting €200 a tonne a couple of weeks ago.

Although I only committed myself to what I expected would be half my total yield at the time, I am a little concerned that filling my contracts, especially for the wheat, may take three quarters of the entire crop, compared to my initial estimate of just under half.

But those are the breaks, I suppose.

In recent weeks, we have all heard our farm leaders and representatives of the milling business express very grave concerns as to the possible knock-on effects for other areas of farm production should the world harvest fall below the minimum requirements.

While Irish beef and dairy farms would be hard hit this winter, it’s in the areas of poultry and pig production that the real affects will be felt. So serious is the problem now perceived to be that France, a member of the G20 club — which includes China, the US, and Russia — last Friday proposed a special meeting of their agricultural ministers to consider how best to arrest further price rises on the world grain markets.

France’s agriculture minister, Stephane Le Foll, has raised the prospect of further volatility in prices, should yields in the US or Russia be so low as to lead to export limits..

In the short term, very little can be done to increase yields in 2012. However, the current crisis does open up the debate on CAP reform in a way that could not have been foreseen six months ago.

While some in Europe have argued that agricultural spending should be curtailed, and the Common Agricultural Policy dismantled, the reality now is that after years of policies designed to restrict European production and supply, we are now near a situation where control of world food supplies comes exclusively under the control of big money on the commodity markets.

Given the seriousness of the current situation, I believe there has to be a watershed.

A watershed in how the EU views the importance of its farming community.

A watershed that could very easily see a new CAP deal being built on an increased budget, as governments fight to retain control of production and stabilise consumer prices.

Stabilising food supply is at least as important as stabilising the banks.


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