Glasshouse fruit and vegetable growers cut back on production as prices rise

Glasshouse fruit and vegetable growers have had to cut back on production in recent months following a five-fold rise in energy bills, the Irish Farmers’ Association (IFA) has warned, predicting higher costs for consumers in coming months.

Harvests were down by a quarter in April, when they should be at their peak, IFA horticulture vice-president Martin Flynn said, adding that growers were forced to cut temperatures which harmed production and led to a “delayed harvest”.

“Farmers had to cut temperatures and conserve energy which then slowed production but caused a flush in a tighter window, meaning a later start to the harvest. It was very difficult because production was lower but costs were increasing,” he said.

Shortages in tomatoes on shelves will be felt throughout the summer because growers delayed the starting of harvesting by nearly a month — from early April to late April, he said.

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“We can’t see energy costs going down short term, which is why the continued support of retailers is an absolute necessity. If retail price increases aren’t relative to growers’ costs, it will be detrimental.”

[ ‘Every day is a horror story’: Tomato producers battling with rising energy prices ]

Insisting costs will cause further uncertainty for growers looking towards 2023, Michael Gaffney, horticulture research adviser at Teagasc, said imports may not be reliable to make up potential shortages. “Growers in other countries are facing similar challenges and similar decisions. Rising input costs aren’t an Ireland-specific issue.”

“They are having to process a lot because of the rising prices and it will make it harder for them to make decisions. These are family businesses, it’s very different to other industries,” Mr Gaffney said.

Natural gas prices, which rose again last week, are now so high that the horticulture industry “could see more and more growers go out of business” unless retailers continue to increase prices, said IFA horticulture policy executive Niamh Brennan.

The Government’s Exceptional Payment Scheme for the industry in early June was a “welcome support, but not a solution,” said Ms Brennan, adding that the €2.8 million funding offer will not help growers stay in business for the long term.

Fruit and vegetable growers who grow under glass have been particularly exposed to the rise in energy prices since they use electricity to offer light for growing plants in order to boost production. They also need natural gas for heating so plants can grow at controlled temperatures, and for fertiliser, which has also seen sharp increases.

Comparing energy bills in March 2021 with 2022, Teagasc found that natural gas prices for growers had jumped by up to 200 per cent, while electricity prices had increased by 131 per cent. In a report researched in May, the IFA found that costs of all types for growers had jumped between 13 per cent and 49 per cent in the past 12 months, and all sectors have seen a rise in multiple input costs according to the organisation’s Niall Madigan.

Following negotiations with retailers, prices for growers have increased, but the extra payments are not enough to absorb higher costs across most fruit and vegetable lines, the IFA report said.

Supermarkets have conceded some price rises to growers “and retailers are working with their suppliers, but more needs to be achieved”, Teagasc’s head of horticulture Dermot Callaghan said.

“Price increases have to take into account the input costs of growers. Anyone growing protected crops will have far more exposure to energy costs, so it depends on the crop too,” he said.

In March, the IFA urged the Government to ban below-cost selling practices by retailers, pointing to Central Statistics Office data that showed food prices have fallen by 9 per cent over the last 11 years, while overall consumer prices rose by 13 per cent.

The report said that due to competitive imports and certain powerful retailers, farmers are currently the weakest link in the chain. It pointed out that they are squeezed by rising input costs, and compressed by output and retail prices.

Out of 1,000 growers, 250 produce 85 per cent of the output.