“The first thing we notice is that the Agricultural Input Index increased by 6.3 percent from December 2017 to December 2018, while the corresponding Agricultural Output Price Index was down by 3.1 percent over the same period,” said President Pat McCormack. “Milk price — that


is, the price paid to farmers, as


opposed to the price paid by consumers — was down by an excess of 10 percent in that period. But if we look across to the inputs paid by those same milk producers, we see energy costs up 5.4 percent, while fertilisers are up overall by 9.7 percent and veterinary costs are up by over 3.1 percent.”


President Pat McCormack said that these statistics prove beyond a doubt that the state’s farmers are being caught, once again, in a “costs-price squeeze” that sees input costs surging while output prices fall or, at best, remain constant.


“Feedstuffs alone went up overall by 10.8 percent,” McCormack continued. “In the context of output prices being under pressure, this is very significant input inflation at a time when we’re constantly told about low inflation and relatively low interest rates.”


McCormack noted that, in times when the prices received outweighed input inflation, farmers could deal somewhat with the steady erosion of their margins due to rising input costs. However, when — as has been the case for the last 18-odd months — milk prices are low and under pressure and farmer beef prices are being hammered by factories,


input inflation becomes a much bigger


negative factor, transforming already tight, “break-even” situations into losses and pushing more and more farmers into cross-subsidisation, leaving their direct payments to be eaten up by bills. “This is the problem that


ICMSA has highlighted again and


again: while farmer prices either remain constant, see-saw or even fall significantly, our inputs costs only ever go in one direction, and that’s upward, at a continuous and constant rate,” said McCormack. “Over any set period, the record shows that net farmer incomes are being eaten into, year-on-year, by the government’s inability — or unwillingness — to face up to the reasons behind this inexorable rise in farm input costs, and by some of the very well-financed and influential groups that seem to be able to increase their own prices without any objection being voiced by anyone except the farmers paying.” McCormack concluded that, at the end of the day, the solution


is “very simple.”


“If farming as we know it is to continue, then output prices are going to have to increase at a higher rate than input prices,” he said, adding, “It’s simply not good enough to tell farmers that they should be happy with the output prices they received ten or twenty years ago when their input costs are rising at a rate the government’s own CSO figures confirm.”


IN MY OPINION: RICHARD HALLERON So, what about industries?


the future of the farming and food


The “Future of Food 2040” report, published this week by the National Farmers’ Union (NFU), paints a glowing picture of the opportunities that will present themselves for farmers and growers across the United Kingdom over the next 20 years. In many ways, the publication reflects the aspirations of the “Harvest 2020” report produced by the Irish government 10 years ago.


Both reports propound the belief that a combination of emerging technologies and a growing population — here and around the world — will provide the necessary momentum to bring the farming and food industries of Britain and Ireland to new heights.


Alas, these propositions, in my opinion, are built on a foundation of shifting sands. What both reports fail to take into account is the salutary fact that farming cannot survive under continued producer price pressure.


Unless there is a general consumer acceptance that food purchased in the shops is currently too cheap, then farmers throughout the U.K. and Ireland will not be in a position to invest in the new systems and technologies that will be required to make the technological miracle so many foresee a reality on the ground.


Food has never been cheaper in our shops. This has been brought about on the back of consistent U.K. and EU policies designed to drive the retail price of food down. And the main casualties of this process have been farmers.


Those outside of agriculture will quickly point to the subsidies the industry receives in order to allow it to survive in a “low retail-price world” — but the sad reality is that the amount of support available to farmers across Europe has been falling over the last number of decades. London will take over the reins of developing agricultural policy for the U.K. as a whole once Brexit becomes a reality. It is hoped that the mandarins of Whitehall will recognise that production agriculture has been starved of the support it needs and act accordingly.


But if farmers can’t get the funding they need through enhanced support measures, the marketplace will have to make this a reality. Currently, the average age of a farmer in the U.K. and Ireland is 58 years. This is clear evidence of the fact that something is fundamentally wrong at the very heart of the farming industry; no new blood coming through in sufficient numbers means there is no sustainable future for the sector.


History has shown that we don’t “do” cheap food in this part of the world. However, we do produce food of the highest quality and to the highest standards. Given this reality, it is only fair that consumers should be expected to pay a fair price for the food they buy in the shops. If this does not become a reality, then one will be forced to ask the fundamental question: will there be a farming industry of any substance left in the U.K. by 2040?


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Alltech.com/ireland AlltechNaturally @Alltech Sarney | Summerhill Road | Dunboyne | Co. Meath FEED COMPOUNDER MARCH/APRIL 2019 PAGE 21


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