Contracts between primary producers and the processors need to be looked at quite seriously for the beef sector, IFA chief economist Rowena Dwyer has said.

On pricing that farmers receive, Dwyer said that, as an economist, she would say that the lack of transparency in terms of margins and prices throughout the food supply chain does not make the playing field even.

“When it comes to beef farming, I find myself questioning why there are not more contracts between primary producers and processors.

“In terms of a risk management tool for that entire supply chain, it just seems to make sense.”

Speaking at the 2017 Agricultural Science Association (ASA) conference, she said that while there are differences, at the end of the day the fixed-price contracts in the dairy sector that are built on the back of long-term supply agreements between the processors and their customers are something that have huge value for the future sustainability of that sector.

“It’s something that I think we need to look at quite seriously from a beef perspective,” she said.

Direct supports and CAP reform

Speaking at the conference last week, Dwyer said that “we’ve a big challenge ahead of us” with the Common Agricultural Policy (CAP) budget.

“We shouldn’t be shy about arguing for a strong CAP budget post-2020.

“The reality of the matter is the CAP, particularly now, should be argued for on the basis that it has been one of the most successful policies that the European project has ever put together.

“It touches families, economies and every single part of Europe and when Europe sits back and goes what is the future of Europe about – well having a strong common policy that’s been in place from the start is probably a good place to start in ensuring that it isn’t just brushed aside for other priorities.”

The economist said that the next reform has to have a greater environmental focus and farmers have to deliver on that.

“What I will say about it is that Irish farmers are probably doing a lot of that at the moment through the various initiatives that they’re engaged in.

“What we need to do is ensure that the next time out, we don’t just oppose things and we make sure that measures that farmers are being asked to do in the environment make sense and are appropriate – that they’re not imposed in the rigid way that the Greening reform was in the last reform.”

Top-up for old farmers

On inter-generational renewal, the last CAP reform had a lot going for it in terms of giving supports to young farmers, she said.

“But I’ve looked at this and said it’s all very well for a young farmer to get a support to start farming.

“If there isn’t a farm to handover to him, in that the older generation doesn’t have the income security to be able to hand it over, you’re going to have a blockage there in generational renewal.”

She suggested that in the next CAP reform there should be serious thought put into an old farmer top-up rather than just a young farmer top-up.

Dwyer said that this would maybe encourage farmers at a point in time to say ‘I will hand over the farm at this designated future point’, but that the farmer has a certainty about his/her income.

“It isn’t just sufficient to say give young farmers a way – the old farmers have to be accommodated to allow them to move on.”

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