Farmers are facing an array of increasing costs
COSTS to farmers for fuel, certain fertilisers, feed and electricity are spiralling with comparative figures from February 2021 and February 2022 showing massive increases – some fertiliser costs are up 180 percent on last year. IFA National Farm Business Chair Mary Rose McDonagh, pictured, said farmers across all sectors are being hit by an array of increasing input costs, which are eroding already low margins for most.
Aggregate agricultural output prices rose 19.2% in February versus 2021 levels, but aggregate input prices rose by over 28%, with increases in certain fertilisers (+180%), fuel (+38.5%), feed (+20%) and electricity (+22%).
“It is simply just not sustainable at current levels,” she said. “Farmers cannot be left in limbo and expected to carry on regardless, to simply suck up the uncertainty and take the losses to ensure food security for Irish consumers.
“Many operations will simply go out of business if nothing changes soon.”
“We need more forward-thinking and swift strategic action from Government and across the value chain.
“Unlike others, farmers haven’t the luxury of being able to pass on the added cost of production to others, and we cannot be left to carry all the risk and cost of the energy crisis,” she said.
“There’s no point investing in crops now if there’s no fertiliser to support its growth along the way, or even fuel for the agri-contractors to harvest it.
“Detailed inventories on fertiliser, fuel and feed stocks must be completed as a matter of urgency and priority given to farmers and contractors to preserve food and feed security,” she said.
“We’ve been told we’re getting over €15m from the EU Crisis Reserve Fund and that Government can top-up to close to €50m, but we’ve no clarity if this will happen, or what kind of supports are potentially going to be made available.”
“The Government established the National Fodder & Food Security Group, increased TAMS investment ceilings for pig and poultry farms, brought in two initial pig support packages and set up the tillage support package to help boost national grain and feed supplies for the coming winter. “While important first steps, supports are needed to grow additional grass silage/fodder for the coming winter.
“It’s now that farmers need to be saving up the ground for first cut silage,” she stated.
“Farmers had to pay up-front to secure necessary inputs this spring, where before they may have purchased on credit and paid during peak milk, when stock were sold or the harvest complete. “Financial institutions need to take a flexible and understanding approach and support those most impacted, ensuring a swift turnaround in the provision of low-cost working capital,” she said.
She also maintained that traders and processors must also offer electronic funds transfer as an option to speed up the transfer of funds into accounts, rather than rely on inefficient cheque payment processes with associated delays in postage, lodgement, and clearance.
The phased exit of Ulster Bank from the market is also creating another layer of complexity for many.
Existing financial providers, in addition to Ulster Bank, need to ensure that adequate resources and supports are devoted to ensuring the smooth transition of its customers and any associated banking facilities and services. “We must avoid any situation where farmers have no functional business current accoun or overdraft to maintain on-farm operations.
“Farmers themselves will need to act and do what is right for themselves, but they need clear direction and support to make the transition process as seamless as possible,” she added.