Fischler proposals to have negative impact on farm machinery industry

FTMTA President, Edwin Pratt, told the Association`s AGM in Abbeyleix last week that as farming continues to go through difficult times, the future of the farm machinery trade will be strongly linked with the outcome on farms.

He added that the Fischler proposals are going to bring about changes on farms that will inevitably impact on farm machinery businesses. He told FTMTA members present to plan their businesses on the basis of a future with lower numbers of farmers and with less intensive agriculture.

If the current EU proposals are passed, they will result in a serious downturn in the levels of activity in business," Edwin Pratt told the FTMTA AGM.

The exact position is difficult to calculate at this stage, there are indications of a cut of 25% in farm prices over a five-year programme, while the milk quota regime is expected to last until 2014.

The price drops being proposed are estimated to reduce income on farms by over €200 million per year in future," he added.

Edwin Pratt said that the cereal sector may be the hardest hit, due to decoupling, a carbon credit proposal and a cut in prices.

As Irish cereal growers are dependent on farm machinery for cost-effective production, the farm machinery industry is naturally concerned for the future of Irish cereal growers as a result of the Fischler proposals.

The likely drop in farm incomes as a result of the changes that the Fischler proposals are expected to bring, is the biggest challenge facing the trade," Edwin said. "He added that the effects of these changes on farming are nothing compared to the likely effects on the farm machinery industry. How will the trade be expected to survive in a world without any support payments to cover its downturn in business.

The FTMTA President said that these changes are especially significant against the background of increasing costs in many aspects of the business.

These costs include labour and insurance costs, the two biggest operational costs in the farm machinery industry.

Insurance costs now account for more than 2% of turnover, in a competitive environment where margins are already tight. He said that the FTMTA was continuing to lobby through the Alliance for Insurance Reform for changes to allow for more cost-effective insurance cover, which has been the target of hefty increases in recent years.

He said that the trade is not satisfied with the performance of its own members group insurance scheme, both in terms of the poor value for money and bad customer service that many members are experiencing. The FTMTA is continuing to seek an improvement in this service as a priority, he said.