'Irish producers will struggle to survive'

Wexford IFA held a briefing session on the Mandelson WTO proposals last week. They invited representatives from all related industries in agribusiness to hear for themselves the full implications for the agricultural sector if the proposals ever become reality. The Farmers Journal talked to some of those present, representing a wide range of the agribusiness community.

Joe Rowe, chief executive, FSR Solutions Group

"Just when many farmers are feeling more positive about their future, these cuts will undermine the profitability and future prospects of many of our clients,'' he said.

"We have already seen the sugar beet industry being wiped out; the prospect of even further damage to the beef, lamb and the dairy sectors will undermine sustainable farming. Our labour services in Farm Solutions are often provided by part-time suckler or sheep farmers, removing their farming income could well also remove them from farm services.

"In our group purchasing service, Buyrite, we help farmers to improve profitability by controlling their costs. These type of price reductions totally undermine efficient farming.''

Denis Kehoe, managing director Kehoe Brothers Machinery

"If farmers do not have a decent income. they will not be doing much business with companies like ours.'' said Denis Kehoe of Kehoe Brothers Machinery.

"Therefore, the viability of agri-related business is threatened by WTO in the same way as farming. "I was aware of WTO as an issue, but did not realise just how serious the issue was before this briefing.''

Confidence in farming has been climbing over the last few years, and this was reflected in increased investment in their business. There is no one better than a farmer to spend when he is making a profit.

Kehoes themselves have expanded in recent times, taking on MF and Fendt dealerships, and know all about the pressures on modern businesses. "Any farmer running his business efficiently has huge overheads. It is impossible to survive at world prices in a high-cost economy.''

Michael Vaughan, Wexford Milk Producers

Michael was very disturbed that Europe would just give away so much for no obvious gain. "The effects on beef would be devastating, but also on dairying, with commodities - and butter in particular - being hit,'' he said.

"We could see all the gains of the last 12 months undone, with milk back to 26c/l, but farmers would actually be much worse off, as their costs have increased massively.

"Every dairy farm is investing to upgrade facilities,'' he continued, "and we cannot afford to see our protections stripped away, removing the possibility of price increases.'' Pointing out that European milk producers could not avail of hormones such as BST or GM feeds, Vaughan stressed the need to maintain a level of food security in Europe. The US is making sure that it will be self-sufficient in food, while the EU seems to be contracting the British disease of cheap food policy.''

Rory Fanning, managing director, Slaney Foods

"The WTO proposals seem excessive and unnecessary'' he said, "at a time when the Argentinian government have imposed a practical ban on exports to control their domestic food inflation and when the vast majority of Brazilian beef is deemed to not reach the standard of traceability required for the European market.

"A massive 70% tariff cut would destabilise the world food market. It would threaten a collapse in European production and affect the Irish industry disproportionately. We must export nine out of ten animals, which represents a constant challenge to the processing sector. Irish producers and processors will struggle to survive the proposed Mandelson cuts. We certainly oppose them, on the grounds that they are unfair, unnecessary, and not in the long term interests of the producer, processor, or consumer.''

Tom Power, Teagasc CEO

"The figures IFA have extrapolated from the WTO proposals show how serious it would be if these proposals come into effect,'' said Wexford Teagasc CEO, Tom Power. "The beef industry, which is just beginning to move forward, would be devastated by a 70% cut in tariffs.

"We have seen in the beet sector how decisions taken at world trade level had repercussions down the line. The demise of that industry in Ireland in 2006 can be directly traced back to a world trade court ruling from years earlier.''

Teagasc, through their advisory, planning, and developmental role, are acutely aware of the high investment and compliance cost of EU farming.

"Farming is a high-investment low-margin business, and is not equipped to cope with price cuts that would follow if these proposals are not taken off the table,'' he concluded.

PJ Darcy, Wexford Farmers Co-op

"One could only agree with the IFA stance on the Mandelson proposals,'' said Wexford Farmers co-op chairman, PJ Darcy.

"The beef and sheep industries could not produce a profit at world prices. The frightening thing is that no-one has put up figures, apart from IFA, and no-one is disputing their findings.''

He believes that the talks should be deferred. "These proposals display poor thinking and bad timing when world trends in food markets are experiencing rapid and turbulent changes.

"There is no logic in undermining European production in such a fluctuating market. It is time to maintain some stability until clearer patterns of worldwide production and consumption emerge.''