IFA President Eddie Downey said that increasing market concentration among the world’s major fertiliser manufacturers has resulted in escalating fertiliser prices, which is undermining the competitiveness of agricultural production. Mr Downey was speaking at IFA’s International Fertiliser Conference held today in Co Laois.
In his address to the conference, Eddie Downey called for immediate action from the EU Commission to suspend import tariffs and initiate a sector enquiry into the fertiliser industry.
Mr Downey said, “The changed support environment for farmers under the reformed Common Agricultural Policy has brought into much sharper focus the impact that input costs have on margins. The ongoing consolidation of the world’s fertiliser industry and increasing market concentration among fewer players is resulting in higher input costs for farmers”.
“Since 2005, total expenditure by Irish farmers on inputs has increased by almost 50%, from €3.7bn to €5.4bn, representing over 70% of the farm-gate value of output produced. Fertiliser, as the second biggest expenditure on farms, has increased by two thirds during the same period – to approximately €600m in 2014. Meanwhile, farm incomes over the same period have fallen. Unless escalating input costs such as fertiliser are effectively addressed at EU level and elsewhere, the ability of farm families to continue to produce an affordable food supply for the expanding world population will be compromised.”
Continuing Mr Downey, “Over the last year, there has been a 30% plus reduction in gas prices, which is the main input in the manufacture of nitrogen products. Natural gas accounts for over 75% of ammonia production costs. However the main manufacturers have increased the price of CAN by up to 10% this season”.
“Given the low income levels in farming the EU Commission must examine why lower production costs have not been reflected in farm gate fertiliser price. It is critical that any activities, which potentially breach competition, are investigated immediately as high fertiliser prices impact directly on farmers’ incomes and food prices.”
“I have again raised the issue with Commissioner Hogan at a meeting in Strasbourg this week. Following today’ conference, IFA will be formally writing to DG Competition requesting that they instigate a sector enquiry and that custom duties on non-EU manufactured fertilisers are suspended with immediate effect.”