‘Pricing contracts only way forward for beef sector’- John Coughlan IFA
A contract to secure the supply and purchase of Irish beef from Irish farmers, with set prices, needs to be a key outcome and action of the Beef Market Taskforce, according to John Coughlan, IFA presidential candidate.
If successfully elected, Coughlan has committed that in his first month, he will move to put a pricing contract on the agenda for the taskforce and will work with Meat Industry Ireland to develop and deliver a contract for Irish farmers.
The lack of price certainty for Irish beef means farmers cannot achieve a sustainable income for their produce which is an issue for the industry and has contributed to unrest, including the recent beef strikes.
In 2018, Ireland’s agri-food industry exported €13.5 billion of food and drink products to 180 countries. However, in the same year, a third of Irish farmers made less than €8,000. On average, farm incomes are 40% less than the minimum wage while the average farm income fell by 21% last year and only 5% of farmers are under the age of 35 years old.
Outlining the need for long-term thinking and immediate action to secure a sustainable future for farming at the presidential debates this week, Coughlan said that a beef contract would deliver:
PRICES: Secure prices for Irish farmers for their beef.
CERTAINTY: Bring demand certainty to Irish beef farmers and supply certainty to Irish beef factories.
HARMONY IN FARMING: Protests like those experienced in recent months which brought unrest and reputational damage to the industry will be avoided. This renewed confidence in the sector will ultimately create an increase in international demand for Irish beef and therefore lead to long term price increases for Irish beef farmers.
FACTORY PROCESSES: Currently, farmers are experiencing lengthy backlogs and delays to have cattle killed, in part due to the knock-on effect of recent protests. This would be avoided if a pricing contract was set and in place. Farmers would finish cattle at periods spread evenly throughout the calendar year, with a prior agreed demand from beef factories. A more even distribution of supply will inevitably prevent back logs at peak periods in future years and significantly reduce costs for farmers currently forced to keep on overweight animals.
FINANCIAL MANAGEMENT: When prices for beef are certain and secure, farmers will have more clarity and transparency on their income and as a result, will be better positioned to manage their finances more efficiently including cost management; plans for future investment and securing financial credit.
INTERNATIONAL MARKET FLUCTUATION: The international market set for beef sits with the varying convergence of supply and demand. This convergence is, for the most part, out of farmers control yet more can be done to reduce fluctuation of price for Irish beef farmers. Once future pricing contracts create an evenly balanced supply of Irish beef, Bord Bia will be equipped to do more to expand into further beef export markets. With supply consistent, demand will inevitably increase and ultimately, with full market transparency, farmers will receive price increases for their produce.
SUPPORT: The IFA would also be central to the process of establishing a contractual framework for Irish beef in providing a dedicated advisory service and team to farmers to ensure contracts put forward meet individual farmer needs.
Currently, contracts are in place for our dairy farmers, ensuring supply and purchase certainty for this key industry which is a significant economic contributor.
The Irish dairy sector has seen unprecedented growth since the removal of supply control quotas in 2015. The expansion of the market has allowed many farmers to grow herd size and significantly increase production. While this expansion may have been triggered by the removal of quotas, the sector was designed for farmer investment due to the long-standing contract framework between dairy farmers and milk co-ops.
With purchase guaranteed, dairy farmers have been facilitated to quickly and heavily invest in dairy expansion leading to its export value reaching a total of €4 billion in 2018.
Commenting today, John Coughlan, candidate for IFA President said:
‘Certainty brings clarity, growth potential, investment and a more stable farming community. That is why I will strongly propose the establishment of future pricing contract between beef farmers and factories, if elected. I will do this in my first month.
‘Meat Industry Ireland has been deliberately slow in showing their hand on how they propose to resolve the crisis in a sector they are a key stakeholder in. The long-term viability of the beef sector has to be the beef factory priority and Irish beef farmers must take action and put viable solutions on the negotiation table.
‘I have extensively researched and used my international connections to learn more about the use of future pricing contracts in the US and mainland Europe. Contracts have allowed certainty in beef sectors there and have been a driver in the development, expansion and investment in farming.
‘A pricing contract that brings security of supply, demand and price will restore stability to Ireland’s beef industry and support us to rebuild the industry as a sustainable contributor to our economy.
‘A beef sector pricing contract is Ireland’s solution and if elected, I will remain farmer focussed with a clear sense of action to ensure it is established.’