READ IFA PRESIDENT JOE HEALY’S ADDRESS TO THE 63RD AGM

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READ IFA PRESIDENT JOE HEALY'S ADDRESS TO THE 63RD AGM
16 Jan 2018

READ IFA PRESIDENT JOE HEALY’S ADDRESS TO THE 63RD AGM

Economics, IFABrexit

2018 will be a defining year for farming. Never before have such major challenges as Brexit, the CAP Budget, Mercosur and climate change converged in a single year. IFA will be there to represent the interests of all farmers.

45 years ago this country took a leap of faith and became part of the then European Economic Community (EEC). It has been positive for farming and for Ireland.

The next 12 months will be a test of the European Union’s commitment to our sector. We expect Europe to stand by farmers and acknowledge the support Irish farmers have shown towards the European Union.

Today, we welcome many new leaders to our Council and indeed a warm welcome to those who continue in their roles from last year. You are here because you have been elected by farmers to lead your region, your county or your sector. This is your Association that gives Irish farmers a voice at the highest level in Ireland and the EU.

We will hear later from each of our commodity chairs as they set out their plans for 2018. Rather than taking a sector-by-sector approach, I intend to focus on broader issues which affect all sectors.

Challenges for 2018

In 1973, we joined an EEC of 9 countries and today we are part of a European Union of 28. As it stands, next year we will revert to an EU of 27.

Our closest neighbour, the UK, a country that joined the EU on the same day as we did, will leave the Union on the 29th of March 2019, just 14 months from now.

Brexit remains the most serious threat to Irish farming and our agri-food sector for half a century.

I want to acknowledge the work done by our Government in the lead up to and during last December’s talks. It sets a foundation stone for the next phase, which will be very important for our sector.

In Brussels, the Commissioner for Agriculture, Phil Hogan, must make the retention of free trade in agriculture and food products between the EU and UK a priority.

Post Brexit, we cannot have a scenario where the UK Government can do as they please as regards agricultural trade with 3rd countries. If the UK wants continued access to the EU market, the EU must insist that the UK will not be free to open their markets to low standard or low value products from outside the EU.

The commitment to continued regulatory alignment is a good start, but we are now entering the crucial stage of the negotiations where the future trading arrangements will be decided.

Understandably, there has been much focus on ensuring there is no hard border in Ireland. The commitment in relation to Regulatory Alignment is significant in avoiding such a scenario.

However for the Irish agri food sector, the focus needs to be on the relationship between the EU and the entirety of the UK.

North-South Regulatory alignment will help to solve one problem – no hard border in Ireland. East-West Regulatory Alignment has the potential to deliver a lot more – to avoid major disruption for Irish food exporters to our largest market, Britain.

As the discussions begin to intensify, we hope and expect to see an early agreement on the transition phase which will give some certainty post March 2019.

CAP Reform

This year will be significant for the future of farming as the debate around the EU Common Agricultural Policy (CAP) post 2020 gathers pace.

In November, Commissioner Hogan published his CAP communique ‘The Future of Food and Farming’. As the Commissioner outlined, the proposals were more about ‘evolution than revolution’.

While there are new concepts to be discussed, the key issue for the first half of 2018 will be the CAP budget, in the context of the EU’s Multi-annual Financial Framework post-2020, which is due to be decided in May.

There must be a strong CAP budget. It must have two elements: direct payments supporting active farmers, AND a well-funded Rural Development Programme.

We’ve heard plenty about a vision for the future of Europe. The rhetoric has to be matched by substance. Our European leaders have to step up and provide a strong budget. This means that Member States will have to contribute more to the EU budget to make up for the shortfall as a result of the UK’s departure.

We cannot have a situation where EU farmers have their incomes cut because the UK decided to leave.

Some of our EU leaders have articulated ambitious plans for new EU Programmes. CAP cannot become the fall guy for any new initiatives. The coffers cannot be raided for new Programmes.

Our EU leaders must ensure that existing programmes are fully funded before they invent new ones.

CAP supports 40 million jobs around Europe. In Ireland, it is responsible for investment of €1.8bn into the rural economy each year. Direct payments are the key determinant of farm incomes.

Our sector generates food exports of €12.6bn.

That doesn’t happen without farmers producing the best food in the world at competitive prices.

Later we will be joined by An Taoiseach Leo Varadkar and we will have a strong message for him.

The CAP is important for Europe, but it’s vital for Ireland, and rural Ireland in particular. Without a strong CAP, Irish beef, sheep and tillage farmers in particular will go out of business. We cannot let this happen.

In addition, we must also remember that the CAP has delivered hugely for EU consumers. It has also delivered significant environmental and social benefits for the entire community.

Now is the moment for this Government and our Taoiseach to show their mettle by standing up for the CAP.

Climate Change

There is now a huge policy focus on climate change and on the UN’s sustainable goals. They feature prominently in Commissioner Hogan’s Communique.

At the recent Foodwise 2025 Conference in Croke Park, Commissioner Hogan issued what he termed a ‘wake up call’ to the Irish agricultural sector on Green House Gas emissions and climate change targets.

I want to assure the Commissioner that Irish farmers have been and continue to be ‘Wide Awake’ on these issues.

Farmers have made huge changes to enhance the environment, improve water quality and advance bio-diversity.

Nine out of every ten measures under the CAP have specific environmental or sustainability elements.

The World population is due to increase from 7 billion to at least 9 billion people by 2050. The world will need to produce a lot more food.

Ireland is the most carbon efficient producer of dairy products in Europe and the 5th most carbon efficient producer of beef in Europe.

Since 1990, our agricultural output has grown by 40% while our GHG emissions have fallen by 3.5%.

Smart Farming is delivering real returns – those who have taken part in the programme have cut emissions by 10% while improving their profitability by an average of €8,700.

Farmers are playing their part and we will continue to do so. However, any ask of us has to be logical. It has to be practical.

And it must be in tandem with our role as food producers and as the businesses which generate much-needed economic activity in rural areas.

What is incredibly frustrating for farmers is to hear so much emphasis on climate issues by key European politicians, while at the same time they are proposing to give Mercosur countries, including Brazil, more access to the European market.

Producing a kilo of beef in Brazil leaves four times the carbon footprint of a kilo of beef produced in Ireland. Therefore, cutting our beef output to allow Brazil increase theirs, is reckless and makes no sense.

This is our message to Trade Commissioner Malmstrom and the EU Commission.

The retired Professor Alan Matthews recently suggested to the Citizens’ Assembly that we should impose a carbon tax on farming to drive farmers away from livestock and towards planting forestry.
The problem with this proposal is that it takes no account of the economic and social impact of such a policy direction.

Sustainability is the buzz word of our generation. However, there are three elements to it – environmental, economic and social.

All three have to be central to decisions about food production

There is already an over concentration of forestry in parts of Ireland, particularly in Leitrim and the west of Ireland.

At our recent meeting in Claremorris, the Chairman of Aurivo Pat Duffy put it well when he said ‘you can’t fill schools and the local GAA team with trees’.

The Suckler Cow herd is a vital National Asset. To underline the importance of the national Suckler Herd, IFA will commission a study to quantify its contribution to the rural economy.

Instead of implementing policies to reduce it, we need initiatives, including increased direct payments, to maintain and enhance it. I’m re-stating here today IFA’s demand for a payment of €200 per suckler cow.

Ireland has only just emerged from the Milk Quota straight jacket. Reducing or restricting numbers would be a disaster for the next generation of farmers.

We must continue to use genetics and other scientific advances to find ways of reducing emissions per livestock unit. This must be the focus rather than reducing the National herd.

On renewables, the Government has to get its act together.

Rather than spend money on fines, let’s see a wider climate activation programme. It will deliver for the environment. It has the potential to develop a range of enterprises and to re-energise the rural economy.

Farmers and rural communities are ready to play their part.

Retail regulation

It’s clear that farmers are not getting a fair share of the retail price.

The figures don’t lie: the retailer takes 51% of the final price, the processor gets 28%, but the farmer only gets 21%.

Retailers are the modern-day dictators abusing their power to accumulate vast profits.

The more-established retailers have been joined recently by Iceland who seem hell bent on putting every Irish fresh food producer out of business with reckless and unsustainable discounting on fresh food.

It’s all about accumulating profits at the expense of farmers and primary producers, and ultimately consumers.

The recent CAP consultation process showed that 97% of EU consumers are in favour of the farmer getting a better share of the retail price. Commissioner Hogan has done good work in this area. But we need to see more.

We will press the new Minister for Business, Heather Humphreys, on the appointment of an independent retail Ombudsman and a ban on below cost selling.

Last month we launched a campaign in the run up to Christmas. It highlighted the various forms of aggressive and unsustainable discounting and misleading labelling by some retailers.

This has a direct hit on farmers’ livelihoods. The campaign was a preview of the IFA Ethical Framework for retailers which will be launched in the coming months.

2017 – IFA work

I want to turn to some of our campaigns since our last AGM.

Throughout 2017, IFA continued to work hard and deliver for farmers, with a strong and focused campaigning on a range of issues.
Budget 2018

We delivered real returns for farmers in the Budget.

  • A €25m increase in ANC, which represents a 13% increase in the overall allocation. When the Minister is making his decision on its distribution, the payment has to reflect the level of natural disadvantage.
  • €25m to kickstart a new low-cost loan package. Like last year, it must be leveraged up to create a loan fund of at least €200m. Last year’s had an average saving of €800 on a typical one-year stocking loan of €30,000. We need these loans in place as a matter of urgency.
  • An increase in the Earned Income Tax Credit to €1,150. This is worth €1,150 to any farmer with an income of more than €16,500. IFA continues to campaign to have this brought up to match the PAYE allowance of €1,650.

The recovery in the national finances is very welcome. Let me be clear here today: farmers took serious cuts in the downturn, but with €3bn available for the next Budget, IFA will expect farmers to get their fair share with the restoration of funding for farm schemes.

IFA Campaigns

This past year, we have also worked hard on the following:

  • Continuous lobbying and pressure on processors to pay a stronger price to farmers across all commodities by highlighting what is justified based on market returns
  • The opening of new markets for live exports, including Turkey. We secured a reduction in Department charges of €1,100 per load of calves. Live exports for 2017 are up 30% to 190,000.
  • We secured a Tillage Aid Scheme for crop losses. Then, following our sit-in last summer, the compensation more than doubled to €10,500 per farmer. I want to acknowledge here today the farmers who spent six days and six nights in Agriculture House.
  •  Our high-level campaign with the European farmer umbrella body COPA contributed to the retention of glyphosate for our grain sector.
  • We established a Credit Support team and a Payments Unit to provide direct assistance to individual farmers.

While the overall statistics on payments for BPS and ANC are strong, there are still problem areas in GLAS, TAMS, KT and organic. On these Schemes farmers are sick of the ‘computer says no’ approach from the Department. It is time for them to get their act together.

Credit Cases

There are also farmers who are having a very difficult time with impaired loans some of which have been sold to vulture funds. Our credit team has been focused on assisting farmers with credit difficulties to negotiate to find solutions.

While we have had a degree a success with this, the pace of progress can be slow and our team is becoming frustrated with delays in getting responses to proposals. This cannot continue.

We met the Central Bank last week and made it clear that some asset managers are a real impediment to progress.

  • The changes to Stamp Duty in the last Budget are a disincentive to land mobility. However, we did secure changes to allow the reduced rate of 1% for all family farm transfers and in cases of land consolidation. We will revisit this issue again in 2018.
  • The extension to hedge-cutting and land management measures are making their way through the Oireachtas. We want to see this moved along.
  • We succeeded in having Minister Ross’ SI on an NCT style test for tractors revoked. However this issue hadn’t gone away and IFA will continue to resist any such measure for tractors engaged in farming activity.
  • We have a Ministerial commitment to introduce a three-year cap on farm business assets under the so-called ‘Fair Deal’ scheme. We will continue to keep the pressure on to get this through the Dail and into legislation.
  • IFA achieved a significant breakthrough in its fight for the abolition of anti-dumping duties on nitrogen fertiliser. The EU Commission launching an investigation last August into Europe’s fertiliser manufacturing industry. Our campaign continues.
  • IFA worked hard to secure the renewal of the Nitrates derogation. However, there are issues around some of the conditions that the Department must address.
  • On fodder, we are very disappointed that there has been no action from the Minister. We will be raising this with him later and we expect a strong and positive response to the crisis.
  • I want to pay tribute today to IFA members who have donated fodder through our county twinning scheme.

Labour shortages

The dairy and horticulture sectors are being held up in the running their businesses because of the lack of labour.

I am calling on the Government to ensure farmers and growers can obtain labour permits for farm workers from outside the EU/EEA.

Farm Safety

Farm safety remains a significant challenge for our sector. We all have a responsibility to do more.

In 2018 for the first time, IFA will roll out a ‘farmer to farmer’ branch safety programme nationally.

It will seek to deepen farmers understanding of the safety risk on their farm and to empower them to improve safety, by facilitating and supporting shared learning and cooperation between farmers locally.

Renewal

Financially, it has been a challenging year for IFA. Farmers continue to support us and this is evident in our membership figures holding up.
For the IFA to be able to do our work effectively, we need all farmers to be making a full contribution to the Association.

Many farmers pay membership and levies to IFA, and contribute huge amounts of their time to work on behalf of their fellow farmers.

Not all farmers can give their time, but I would ask all farmers to support the Association by paying their levies. It is fair and proportionate and represents a contribution of just €1.50 in every €1,000 of sales.

There are huge challenges facing farmers. IFA needs to be properly resourced by farmers so we can operate without fear or favour.

During 2018, the Association put a three year plan in place to close the current deficit and return to a balanced outcome over the next three years. This will involve a combination of rebuilding our income and reducing costs.
The scale of work IFA undertakes could not be done without the commitment and dedication of farmers at all levels of the organisation.

I want to recognise in particular those officers on Council who are completing their terms. You should be proud of your efforts on behalf of your fellow farmers and I want to personally thank you for your support.

To those who are taking up a role on Council, I want to welcome you and I want to assure you of our support.

I particularly want to welcome the four women who are taking up their roles on Council today.

We want to have more women in leadership positions in IFA. We can do more and we will do more.

Conclusion

Agriculture saved this country following the last economic crash and it has played a huge part in rebuilding the economy. Only last week we heard clearly how vulnerable our economy is to moves in foreign direct investment. Farming won’t be moving to any other country.

But I say clearly to the Government, now that the economy is improving, don’t forget farmers. Farming is the backbone of the rural economy. And with the right national and EU policies, we will continue to play our part.

In the current political climate, we could have an election at any time. I want to assure farmers that IFA will be ready. And I want to remind politicians that there are half a million votes in farm households in rural constituencies.

We don’t just get up early in the morning; we can be up all night for calving or lambing or to harvest our crops before the weather changes.

If you give us the right support, farm families will keep the economy turning in rural Ireland – 24 hours a day, 365 days of the year.

 

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