Commissioner has to act on forum findings and

HE ewes got €10 and the pensioners only got €5,” was the comment following the Budget.

Last week saw a special emphasis on the sheep sector, not just within the national Budget but also at European level, with the launch of Commissioner Hogan’s Sheepmeat Forum report. So why are sheep currently under the spotlight?

Sheep a contracting sector

Since the 1980s, sheep numbers in Europe have fallen by 25 million head. The UK, Spain, Romania and Greece are the main sheepmeat-producing countries in Europe, with Ireland coming in seventh place. Since 1990, sheep numbers have fallen by over 30pc in the UK and a staggering 45pc in Ireland.

It is no surprise sheep numbers are in decline given the poor profitability at farm level. According to Teagasc’s National Farm Survey, sheep farm incomes averaged about €15,000 over the last five years but, crucially, direct payments typically comprised over 100pc of income.

In other words, the cost of keeping a sheep exceeds the market price. The sustainability of this situation has to be questioned, especially considering that direct payments are fully decoupled. Clearly there is a supply side problem, but the demand side is also problematic.

Why don’t more young people eat lamb?

Lamb is in a losing battle against cheaper meats. Expenditure on lamb in the EU has declined by over 20pc in the last 15 years, while poultry expenditure increased by 70pc. The average age of European lamb consumers is increasing, with younger consumers turning away from a product that is often perceived as being fatty, difficult to cook and the subject of recent anti-meat eating campaigns.

Contracting supply, albeit along with contracting demand, has resulted in some recent increases in producer prices, but price remains volatile and typically input costs are increasing as fast, if not faster, than output prices.

It was in this context that Commissioner Hogan asked the Sheepmeat Forum, an EU level committee chaired by John Bryan (former IFA President), to put forward a positive roadmap for the sector. One of the main recommendations arising from the forum and presented in Brussels last week was the need for a promotion programme for lamb, aimed at reversing declining consumption trends and tackling consumers’ often negative perception of lamb. The report also called for improved market transparency around pricing, as well as a newly-designed environmental payment for sheep in recognition of the important role sheep farmers play in delivering public goods.

Sheep and the public good

Public goods are those provided by the State rather than private industry as