5th January 2002

A Europe in transition

By Matt Dempsey

The Farmers' Journal is part of Eurofarm, the European-wide body that represents the main farming papers in Europe.

At our annual general meeting held in association with Agritechnica the huge farm machinery fair in Hanover, we compared notes on 2001 and the prices paid for farm commodities.

The introduction of the euro saved a great deal of mental arithmetic and reduced the scope for arithmetical mistakes.

Part of the advantage of Eurofarm is that it is not just confined to EU members.

We also have members from the members-in-waiting - the Czech Republic and Poland - as well as the determined-to-stay-outside the EU countries of Norway and Switzerland.

Both of the latter two countries have mouthwatering farm prices.

But firstly, those who are hoping to come in.

Czech Republic

The Czechs are busy preparing for EU membership. They have introduced milk and sugar beet quotas. With large farms inherited from the Communist Co-operative farm system they consider themselves competitive.

With a total of 22,000 farms bigger than 3 ha they have had a good 2001, helped enormously it should be said by a special national subsidy of €205 million given at the end of 2000. That's almost €10,000 per farm.

Anybody that imagines farm prices in Eastern Europe are only a fraction of ours should get acquainted with the facts.

Soft wheat for the harvest just gone by made an average price of €101 tonne, much the same as Ireland; barley made €125 a ton, far above our price of 493. While the pork price is €1.41 a kg, much the same as the Czech steer beef price. Both these meats were well below Irish prices. Milk prices, however, are the same as in the EU.

Farmers in the Czech Republic are looking forward to EU membership, even though they feel (and they're right) that the Czech public knows little about agriculture and cares less.

Denmark

Denmark has had a reasonable 2001 with farm incomes up about 5 per cent - even though the first half of the year was dominated by foot and mouth - which, by draconian action, Denmark succeeded in keeping out completely.

The highest income group among farmers will be pig producers with an average income for 2001 expected to be €95,000, but this was after a difficult 2000. Next will be arable farmers with €40,000 and then dairying where the average income is expected to be €25,000.

While there is a general air of optimism and competitiveness in Danish farming there is still a view that too few young people are going into farming. With a superbly structured co-operatively based dairy, grain and pig sector they are confident they can remain profitable in business.

Their general level of prices is higher than ours. Their wheat made €127 at harvest versus our €103 and barley €115 with ours €93, while their milk price is consistently the best in Europe.

France

France has had a medium year with incomes up 1.3 per cent. Weather affected their huge cereal area, but prices were higher at €115 per tonne for wheat, an increase of 5.5 per cent. Barley prices were back by almost 10 per cent to €102.

The real star increase was in oilseed rape, where scarcity is pushing up prices right across Europe.

The French price in October had reached €240 a tonne. They have held their best beef to within a few per cent of last year, but older beef and cows have dropped significantly.

In general, French farmers have detected a real change of political and public mood. A Socialist government with compulsory modulation and spinning a continuous line of factory farming leading to pollution, BSE and foot and mouth has dented morale.

A new general REPS type scheme has been brought in together with modulation. Interestingly the Young Farmers Organisation wants to scrap direct aids and go back to a system that pays proper prices for their products.

The FNESA (the equivalent of the IFA) shares this point of view to an extent, but thinks a full price restoration policy is unrealistic.

As elsewhere in Europe there are less people going into farming than expected: 12,000 is the national target, but only 6,000 claimed the installation aid in 2001.

Germany

The German harvest in 2001 escaped the bad conditions of France and Britain and almost uniquely prices fell by 6 per cent to an average of €107.5 per tonne.

But the critically important pig industry has had a good year with prices up by more than 6 per cent to €1.55 a kg, as elsewhere in Europe lamb was a boom sector.

But the real loser was beef with a 20 per cent fall in young bull prices, while cow beef was down a massive 35 per cent at an average of €1.40/kg.

Italy

It may be a single market but transport costs quickly show up in the deficit countries with Italy maintaining strong prices by the year-end for young beef and lamb and wheat, but following incredibly bad publicity on BSE cull cow prices collapsed.

Outside the EU?

Make sure your Government has plenty of oil and that your country doesn't need to export much.

In addition to a whole plethora of regional and production aids Norwegian farm prices are mouth watering.

• Beef €3.92 a kg (140p/lb)
• Pork €2.22 a kg
• Barley €220 a tonne
• Wheat €260 a tonne

Interesting but irrelevant in the broader scheme of things.