Thursday, 17 April 2008

Irish farmers on strike to maintain welfare and trade protections as global agriculture booms

Irish farmers supported by agricultural businesses, are to go on strike today to get attention for a campaign to protect the welfare and trade protection privileges of the European Union’s Common Agricultural Policy (CAP), in opposition to concessions from Europe and the US on access to agricultural products in current global trade talks, in return for a reduction in industrial import tariffs by developing countries. India for example has tariffs as high as 34% on some industrial products.

Ireland’s first world economy is a direct result of the previous liberalisation of trade in industrial goods and services between developed countries. Since 1973, Irish agriculture has been the principal per capita beneficiary of the CAP and by 2013 when wealthy Ireland becomes a net contributor to the EU budget, it will have received a 40-year bonanza that will amount to to €41 billion by the time we become a net contributor in 2013.

Thousands of farmers are expected to attend a protest in Dublin to coincide with the visit to Dublin Castle today by President of the European Commission, José Manuel Barroso. Barroso is due to address the European Forum.

The protest, organised by the Irish Farmers’ Association (IFA), the Irish Creamery Milk Suppliers’ Association and Macra na Feirme, has won the support of Creamery co-operatives, meat processing plants, marts, veterinary outlets and grain suppliers.

Meat Industry Ireland, Anglo-Irish Beef Processors (eight locations), Dawn Meats (5 locations), the Irish Feed & Grain Association with 60 outlets, marts in Cork, Offaly, Donegal and Kilkenny, IFAC and Greencore Malt are supporting the protest.

Larry Goodman is the country’s largest beef processor and he heads the beneficiaries of the CAP payment system. He receives more than €10,000 per week in a direct cash transfer, related to his 1,600 acre estate. The payment is not tied to any production or output on the estate.

With food prices surging and half the world’s population in Asia in 12 countries that will provide a growing demand for agricultural products for the foreseeable future, world agriculture is at a new dawn.

Irish food companies are booming and on Wednesday, Dairygold reported that profits jumped from €0.24m in 2006 to to €21.5m last year, while group turnover was up 15pc from €543m to €625m.

At this time of a global boom in agriculture, it is claimed that the Irish economy would €4 billion; 50,000 farmers would be impoverished and 50,000 job losses would occur in the processing sector,

The IFA is Ireland’s most successful “trade” union and as the two biggest Irish political parties get bedrock support from farmers, there is no rational debate on agriculture in the political process.

This week, Fine Gael agriculture and food spokesman Michael Creed, TD, said Irish food producers have worked tirelessly and invested heavily to ensure that the food they produce is of the highest quality and fully traceable to source.
“The current trade deal on offer will mean that all their efforts will have been in vain as the European Union market will become fully exposed to imports from dollar-a-day economies, where hygiene, food safety and animal welfare are non-issues,” he said.

Creed said Fine Gael will be calling on the Government in a Private Members Bill in the Dáil to mount a major political and diplomatic initiative to protect the Common Agricultural Policy and Irish agricultural interests.
It will also urge the Government to ensure that food safety and security, climate change, animal welfare, and human health interests are priorities in the context of any agreement and to signal its willingness to use all necessary measures to defeat the current proposals.

..dollar-a-day economies: Some cheek indeed when our own agricultural prosperity has been the direct result of funds from foreign taxpayers.

There are big opportunities in Asia, which both Australia and New Zealand are grasping as the demand for food products grows.

Tommy Doherty, partner at business consultant Mazars,  highlighted recently how New Zealand is taking advantage of markets in Europe.

New Zealand’s success has been its innovative approach to new markets especially but not only in Asia, where growing wealth is seeing consumers shift their eating habits from root vegetables to dairy and meat products.

“The food industry in New Zealand developed specific measures and worked with external partners to develop new technologies and new products. They created specific products for specific markets and created best practice dairy markets in Asia. And despite being 12,000 miles away from European markets, New Zealand has become increasingly competitive for its chilled lamb and their lamb exports to the EU have increased 40% in the last two years”.

The Irish Farmers’ Association is stuck in the past, seeking retention of protections and supports with the aid of the Irish Government. Banning Brazilian beef is seen as a panacea but if you are looking for a steak house across Europe, what’s the chances of finding an Irish one compared with a Brazilian one?

It would be some news indeed, if the IFA called for a reform of laws which make multimillionaires of farmers close to Irish villages and towns.

Up to €4.6bn of the €18.5bn of taxpayers’ money that will be spent on new main roads over the next decade will go into the pockets of landowners. Fred Barry, chief executive of the National Roads Authority is reported as saying that the increases in the cost of land for major roads projects was “disturbing”.
Land acquisition accounts for 23% of the cost of roads projects in Ireland, but just 12% in England, 10% in Denmark, 9.4% in Greece and 1% in Iceland. A further 2% of the €18.5bn provided in the Government’s Transport 21 for road building over the next decade will go to archaeologists.

I was born on a small farm and I recognise that there would be increased market competition as a result of opening up the European market but that is an issue that every Irish businessperson in the tradable goods and services sector has to contend with.

In this dawn of a golden age for agriculture, more focus on opening up markets rather than calls for bans while having up to 80% income support from urban taxpayers, would likely be more productive in a changing world.

By Michael Hennigan – Founder and Editor of Finfacts