The consolidation of the fertiliser industry has eliminated effective competition in the market and is impacting very negatively on farm incomes and the wider agri-industry, IFA President Eddie Downey has warned.
The IFA President was speaking ahead of a major conference to be hosted by the IFA later this month, at which market concentration among the major fertiliser manufacturers and mechanisms to restore competition in the market will be examined by key international speakers.
Mr Downey said the changed support environment for farmers under the reformed Common Agricultural Policy has brought the impact that input costs have on margins into much sharper focus.
“The ongoing consolidation of the world’s fertiliser industry, and increasing market concentration among fewer players, is resulting in higher farm gate prices. Changes to EU regulations are needed to address market concentration and the unbalanced power held by a small number of multinational input suppliers. The Government and agri-food industry must engage with the EU Commission to tackle the major cartels controlling, in particular, the supply and price of fertiliser. The EU’s DG Competition must examine why there is a disparity on fertiliser pricing.”
The IFA President welcomed Commissioner Hogan’s commitment to raise competition in the Fertilizer sector with EU Commissioner for Competition, Margrethe Vestager.
Downey pointed out that since 2005, total expenditure by Irish farmers on inputs has increased in excess of 50%, from €3.7b to €5.7b, representing over 70% of the farm-gate value of output produced. He said, “Fertiliser, as the second biggest expenditure on farms, has seen prices increase by over 75% during the same period – to over €600m in 2014. Meanwhile, farm incomes over the same period have fallen by more than 20%.
“Ammonia used to produce urea and nitrates is particularly energy dependent and natural gas accounts for over 75% of ammonia production costs. Despite a 30% plus fall in the average wholesale gas price for 2014, European nitrogen manufacturers increased wholesale CAN and urea prices by 5% to 10%.”
IFA President, Eddie Downey and IFA Inputs Chairman James McCarthy will lead a panel of international speakers including:
- Maximo Torero, International Food Policy Research Institute;
- Nikolay Mizulin, Partner Mayer Brown; and,
- Max Schulman, Chairman Copa-Cogeca Cereals Working Group.
The IFA International Fertiliser Conference will be of interest to farmers, agri-merchants, co-ops and suppliers in addition to food and drinks manufacturers and processors and EU and Government policy makers.
The conference will take place in the Heritage Hotel, Killenard, Portlaoise on April 30th, commencing at 4.30pm.
To reserve a place at the Conference, contact Ciara Nagle on [email protected] / 01-4260336 by Thursday 23rd April 2015. Registration is free to IFA members and €20 for non-members.