IFA National Grain Chairman Liam Dunne said that the EU Commission must act now to stem the deepening income crisis developing on tillage farms. Failure to control undue influence by speculative investors on grain and oilseed prices, and anti-competitive practices by fertiliser manufacturers, is compounding the income situation.
Mr Dunne said, “Harvest prices for the third year in a row will struggle to cover production costs, despite good yields, as investors bet on international grain and oilseed prices moving lower. Farmers will once again end up subsidising grain production from their basic / greening payment or other reserves that are well depleted this stage following on from a prolonged period of low grain prices”.
“The relentless price/cost squeeze is negatively impacting on the tillage sector and unless there is a serious realignment of our cost base, arable crop farming has a limited future in Europe, never mind Ireland. Farmers, as price takers, unlike input manufacturers and suppliers, have no opportunity to recoup increased costs from the marketplace.”
“Soaring fertiliser prices over recent years have also aggravated the income situation. Historically, the price received for a tonne of green grain purchased a tonne of CAN. However, in recent years it takes well over two tonnes of grain to purchase that tonne of fertiliser. Increasing consolidation of the world’s fertiliser industry has allowed the larger players to push through unjustified price increases when their main cost, which is energy, has plummeted. The EU Commission as a matter of urgency must instigate a sector enquiry into the fertiliser industry and immediately suspend customs duties on imported fertilisers.”
“The political establishment needs to wake up. Their failure to rein in speculative investment in agricultural commodities and tackle fertiliser price cartels is compounding the situation. Farm families cannot ride out the boom/bust cycles resulting from speculative investment. Converging payments and onerous greening requirements under the new CAP are aggravating the income situation for growers. EU Commissioner Phil Hogan must as a matter of urgency, realign CAP policy so that it can deliver viable incomes for farm families while addressing environmental issues. The current policy is flawed, ignores market realities and undermines sustainable crop production.”