Farm BusinessUnfair Trading Practices

Producer Organisations Need Stronger Support to Succeed

Addressing a seminar organised by IFA on Producer Organisations today, IFA President Joe Healy said producer groups have shown their ability to organise farmers very well and negotiate additional top-up bonus prices with processors. However, the meat plants have found a way of undermining this by using very low quoted prices every week.

Joe Healy said, “We are also aware of numerous situations where processors and agents have used every trick in the book to pick off members of producer groups to see if they can divide and break up groups”.

In the livestock and beef sector, both the present Minister Michael Creed and his predecessor Minister Coveney have spoken a lot about the opportunity for beef farmers to set up producer organisations. In theory, this is positive. But the reality is the dominant retailers and meat processors hold all the cards.

Producer Organisations need a lot more support and particularly financial support from the Department of Agriculture. €1,500 to set up a group and €1,500 for legal advice is not sufficient. Groups need ongoing support on an annual basis, especially in the early years to keep going, if they have any chance of being able to stand up to the dominance of the powerful retailers and processors.

The food supply chain is characterised by a concentration of buying power in the hands of a small number of powerful retail groups. In Ireland alone, the top three of SuperValu, Dunnes and Tesco have 67% of retail food sales. Two multinational discounters Aldi and Lidl have another 21.5% share of the market between them.

On the beef processing side, the big three groups of ABP, Dawn and Kepak have 65% of the total market between them.

“As farmers, this is the power of the retail and processing sectors we are up against. IFA wants to support producer organisations, where farmers wish to set up groups. We have registered with the Department of Agriculture as an approved facilitator. We are available to help and assist any group of farmer members wishing to set up a producer organisation in any sector,” he said.

Over the years, the IFA has played a key leadership role in the formation of up to 60 farmer co-operatives in the livestock marts business. We were also key to the establishment of groups and co-operatives in the dairy sector.

IFA was instrumental in the establishment of up to 20 producer groups in the sheep area. Our farmer members were to the fore in the setting up of beef producer groups over the years in Laois, Monaghan, Cork, Longford and Louth.

IFA has also been to the fore across other areas like horticulture, mushrooms and other areas in assisting farmers in forming groups. Family farms are been forced out through globalisation and the constant race to the bottom on prices. Farmers cannot survive the downward price pressure being pushed back against them.

In Ireland, the establishment of co-ops by farmers have proven to be a major success and has delivered in spades for farmers. This is particularly the case in dairy processing and also in livestock marts. It’s not the case in beef, sheep or pig meat processing.

As Chairman of the COPA group on the food chain, I have worked hard at EU level, with Commissioner Hogan in driving change on unfair trading practices and increased transparency across the food chain. We have made some progress, but a lot more needs to be done.

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