Farm incomes

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Farm incomes

Rising input costs, the reduction in CAP payments, successive budget cuts to agriculture and greater exposure to volatile world commodity markets are threatening the viability of family farms.

Teagasc estimates the average family farm income will have dropped by 9% last year to €24,000. This represents less than 60% of the average industrial wage. We need policy priorities that have at their core the need to deliver a fair return to family farms to ensure the future sustainability and growth of the agricultural industry and a vibrant rural economy.

What’s needed?

Farm scheme funding

Full national funding for the implementation of all farm schemes under the Rural Development Programme (RDP) is critically important for the low income farming sectors, underpins farm investment and output and in turn contributes to balanced economic growth.

Farmers need:

  • Sufficient funding for farm schemes to deliver annual expenditure of €580m (national and EU) under the RDP. This includes funding for the following schemes: Green Low Carbon Agri-environmental Scheme (GLAS), Areas of Natural Constraint (ANCs), Targeted Agricultural Measures (TAMs), Beef Data and Genomics Programme (BDGP), Knowledge Transfer, and Targeted agri-environment and organics. Click here for more on farm scheme priorities.
  • Further national resources and unused CAP funds must be directed to support vulnerable sectors and regions, in particular through the introduction of targeted payments for Sheep, restoration of ANC payments and increased payments for the suckler herd.

Full implementation of Farmers’ Charter

Farm families are heavily dependent on direct payments under the Basic Payment Scheme, Greening and the Rural Development Programme.

The new Charter of Rights for Farmers, negotiated by IFA, contains clear objectives to underpin the rights of farmers and ensure fairness and respect for farm families. The Charter includes important improvements and commitments on payment deadlines, inspection protocols and appeals.

The Government must ensure the new Charter is fully implemented and that all commitments are delivered so that farmers can maximise the benefits from Direct Payments and farm schemes.

Action to tackle rising input costs

Rapidly rising input costs – for feed, fertiliser and energy in particular – are threatening to undermine the profitability of farming enterprises. Action is required at national and EU level to strategically address input cartels particularly in the fertiliser industry and to strengthen farmers’ purchasing power in order drive down input costs.

Farmers need:

  • Funding for new farm input purchasing groups and the upskilling of existing groups;
  • Irish Government pressure for the instigation of a sector enquiry into the European fertiliser industry by DG Competition and the immediate suspension of customs duties on imports of fertiliser from outside the EU;
  • Government action to ensure that EU veterinary medicine regulations protect existing supply routes and provide a transparent and competitively priced single EU market for veterinary medicinal products;
  • No further increase in the Carbon Tax, as this would further erode the competitiveness of the exporting agri-food sector;
  • Government action to guard against any cost increases for oil prices arising from any change in status of the Whitegate facility; and,
  • Abolition of the Joint Labour Committee for agricultural workers whose functions have been superseded by the introduction of primary legislation, the National Minimum Wage laws, and the Organisation of Working Time Act.

Retailer regulation and viable output prices

In Ireland and at EU level, there is a major imbalance of power in the food supply chain between retailers on the one hand and processors, suppliers and primary producers on the other. The small number of large retailers clearly have excessive buying power and the ability to dictate prices levels back to farmers, often driving prices to uneconomic level and even below the cost of production.

While the Competition and Consumer Protection Act 2014 has begun to address the issue of retailer regulation the IFA has identified further policy actions:

  • Stronger legislation is required, including the introduction of an Independent Ombudsman to oversee and regulate the behaviour of retailers and to ban below-cost selling;
  • Increased price transparency is required to improve the overall functioning of the market;
  • This requires the introduction of an EU wholesale price reporting system for food produce, particularly in the meat sector; and,
  • Legislation to provide for the disclosure of profits in the Irish market by large retail multiples which would improve transparency and re-balance bargaining power in the food supply chain.

Measures to deal with price volatility

More than ever, farmers are exposed to the extreme price volatility of world commodity markets which is threatening the sustainability of family farm businesses.

  • Government agencies including Teagasc must take a leading role in the promotion of price risk management tools and the training of farmers in risk management; and,
  • Pressure at EU level to overcome “State Aid” restrictions and allow the introduction of taxation instruments which are necessary to help farmers deal with income volatility.
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