Time for just rewards

After investing heavily to meet regulations and supply the market, farmers should now be rewarded with higher prices for their produce,

Richard Halleron contends.

Northern Ireland agriculture enters the autumn of 2010 in a state of some apprehension over its future well-being. Beef producers, as a case in point, continue to press for an increase in farm gate returns. They rightly argue that the commercial market is currently strong enough to reflect back to them a price which will compensate for at least some of the recent hikes in feed and other input costs.

It will, of course, take time for the province’s agri-food sector as a whole to settle down in the wake of the realisation that the marketplace is now the only real show in town. Throughout the last couple of years farmers here in Northern Ireland have been bombarded with information on the repercussions of increased bio-fuels output, global warming – leading to much more extreme weather patterns – and the impact all of this will have on international food markets.

Meanwhile, the EU seems to be shaping up for a formal debate over the next few months, which will set the scene for further radical change in CAP support down the line. The reality is that Northern Ireland agriculture will have to make do with considerably less support than was previously the case. And even within the context of the current support system the omens do not look good.

The single farm payment envelope for Northern Ireland was fixed in euro terms back in 2005. However, the weakness of sterling against the euro zone currency meant that local farmers have been receiving more pounds for their euro since 2007. Unfortunately, the recent strengthening of sterling will, almost certainly, bring about a reversal in this trend for 2010.

Over the past four decades there has been a general tacit acceptance of the principle that ‘cheap food’ was the ‘price’ to be paid for a heavily subsidised farming industry. The worry now is that the envisaged reductions in agri-support will not be accompanied by the necessary increase in prices that will allow farmers to move their businesses forward with some degree of confidence.

Twenty years ago Europe’s intervention stores were over flowing with cereals, beef and dairy products. Today they lie empty. In the intervening period EU farm output has been brought, more or less, into line with demand. Mirroring this development, however, has been the unrelenting rise in the commercial influence exerted by the supermarkets.

But this has not all been to the detriment of the farming industry. The work that Tesco is doing with local Aberdeen Angus producers is an excellent example of what can be done to improve farmer returns in a meaningful way.

But initiatives like this only account for a minimal percentage of the total output generated by Northern Ireland’s farming sector. In a more general sense producers in almost every sector have invested heavily in their businesses over recent years to attain the standards laid down within the various farm quality assurance schemes.

What’s more, agriculture in Northern Ireland is more tightly regulated, from a food standards point of view, than possibly any other industry in the world today. Investment and compliance with ever-tightening regulations are all very good. But farmers will quickly point out that they need market prices commensurate with the overall commitment they are expected to make.

So do local farmers deserve a lift in prices? Of course they do – and the sooner the better.