IFA National Grain Committee Chairman Liam Dunne said that arable crop producers face an uncertain future as bearish sentiment by speculative investors drives international and Irish grain prices significantly below the cost of production. In addition, converging payments combined with the imposition of unworkable greening rules under the new CAP, and continually rising crop input costs, will decimate incomes and force many farmers out of production.
Liam Dunne said, “The current situation is not sustainable given the relentless price cost squeeze and resulting negative crop margins. Converging payments under the new CAP coupled with the imposition of bureaucratic greening measures will see many farmers reduce their arable crop area if not discontinuing crop production altogether. Despite bumper yields last harvest, cereal sowings dropped by an estimated 17,000ha this season on the back of falling incomes. It is likely that a further 30,000ha to 50,000ha will disappear from production over the next two years”.
He said, “There has been an abject failure by the political establishment to reduce the influence that speculative investors have on agricultural commodity prices. This must be tackled as a matter of urgency as farmers and the industry cannot sustain these boom / bust cycles”.
“There is an onus on manufacturers and suppliers to reduce input prices significantly and to pass back the benefit to growers immediately as the supply trade has enjoyed increased margins on the back of stronger grain prices over recent years.”
“As for the CAP, the current greening measure proposals are flawed and should be scrapped. They scheme is so complex that it will force many farmers to quit arable crop production, thus increasing Ireland’s reliance on more expensive imports.”