Protecting producers - Balance in relationship is skewed

SEVERAL thousand farmers protested in Dublin yesterday on two issues that should be of concern to all consumers.

One focussed on how farmers — as well as many other food producers — feel they are exploited by dominant retailers. Just like lots of workers they feel that their relatively vulnerable position is being used to prevent them earning a decent living.

The Irish Farmers’ Association (IFA) also protested over a raid on their head office by the Competition Authority. During the raid staff were questioned and files seized. The authority is investigating the possibility of milk price-fixing by farmers.

This is by far the easier issue to deal with.

Farmers, like everyone else, are subject to the law and if that means the Competition Authority decides to investigate their organisation to protect consumers then so be it. If price fixing is established there will be consequences. If not the matter is closed and consumers are reassured. That’s how regulation works.

The allegation by IFA president John Bryan that the Competition Authority “is more interested in doing the bidding of big retailers rather than defending the small producer” demands a response from the Authority and the supervising minister. Consumers must be able to believe this watchdog is objective, independent and capable of protecting their interests. Clearly the IFA does not believes it is.

The second issue, a fair price for farm produce, is far, far more complex.

Farmers are not the only group to feel threatened by supermarket chains. Small, independent retailers, often family businesses just like most farms, have felt the cold grip of supermarket competition. This is the market at work and it takes no prisoners. Regulation was unable to save those businesses or the jobs they supported.

Nevertheless, every group of efficient workers or producers should be able to expect some form of protection, especially so if the group being exploited produces the thing that sustains us all, food. This has been recognised by paying subsidies to farmers but many of them argue that the ultimate beneficiaries of those subsidies are the supermarkets, not farmers.

Many of the IFA’s allegations — hello money, more money for best shelf position and off-invoice rebates — deserve investigation though what the next step after that might be remains to be seen. After all,it is probable that supermarkets are destined to become bigger and more powerful, not less so.

In the greater scheme of things national food security and the contribution farming might make to rebuilding our economy are the most important issues in this debate. If this means an intervention between retailers, producers and consumers then so be it. We cannot afford a situation where Irish farming collapses because of the market ambitions of supermarkets and, to a lesser degree, the wishes of consumers who have warmly welcomed the lower prices that supermarkets offer. We may have reached the point where it is impossible to sustain viable farms, increase supermarket profits and provide the cheap food that has become available in recent decades. Something has to give.