A fair deal for beef farmers

Agriculture is a cyclical business and beef and sheep farmers are going through a particularly tough time. Their dismay over falling factory prices was vented when the Irish Farmers' Association protested at the Department of Agriculture in Dublin and dumped bales of hay in the street. The demonstration was relatively subdued. It centred on demands that Minister for Agriculture Simon Coveney should intervene and ensure that factories paid higher prices to beef farmers.

In recent years, the food processing industry has been a success story. Output has increased rapidly, but the benefits have been unevenly spread. Dairy farmers have done particularly well, even allowing for higher costs, because of buoyant world markets. But demand for beef and sheep meat peaked in 2011 and has declined since then. In effect, a two-speed agriculture has emerged, with the average dairy farmer earning more than twice what his beef and sheep-rearing counterpart does.

World demand drives the industry. But speculative trading and the concentration of ownership of processing plants at international level have raised concerns that farmers are being disadvantaged in terms of price. This is a common complaint at national level, where farmers accuse supermarket chains of engaging in predatory pricing at their expense. Because of the nature of the free market, however, governments have been reluctant to interfere. In the current situation, Mr Coveney has invited the parties to discuss their conflicting requirements and develop a clear understanding of what is required to develop a sustainable beef industry.

Volatility in prices caused a 40 per cent drop in average farm incomes between 2007 and 2009. But prices bounced back and the fall was more than reversed by 2011. Based on that recovery, a Food Harvest plan envisaged beef output rising by 20 per cent over a ten-year period. Since then, dairy prices powered ahead but meat prices fell. These developments, combined with poor weather and a fodder crisis, imposed great hardship on beef and sheep farmers. In the past year, cattle prices declined by a further 15 per cent. In some cases, if single farm subsidies from Brussels were excluded, producers would be operating at a loss.

Recession in Europe has depressed the demand for meat while competition in other export markets is growing. Brazil has emerged as the largest beef exporter in the world, toppling Argentina and moving past the United States and Australia. Ireland comes fifth and exports 90 per cent of its beef. Farmers are now said to be de-stocking beef cows and reducing their suckler herds. There is talk of farms not being economically viable. That defeatist language should not be tolerated. Ireland needs a stable rural population and Mr Coveney must ensure that farmers receive a fair deal from food processing industries.