‘Meat plants aim to divide and conquer’

Addressing a seminar on Producer Organisations, 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.

At the seminar, organised by IFA, Mr 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, 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, according to Mr Healy.

“Producer Organisations need a lot more support, 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,” he said.

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, 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,” Mr Healy said.