In many respects despite the differing and conflicting views about agriculture and climate change in Ireland there is a common acceptance of the need to incentivise low-carbon production methods.

The main point of difference seems to be whether the incentive should be negative ie based on a carbon tax or positive based on either a price or direct payment support for carbon efficient or carbon compliant production.

To better inform the debate on agriculture and climate change policy, perhaps we need look to the climate change-based pricing arrangements introduced in the energy sector.

Speaking at the Farmers Journal Dairy Day economist John Fitzgerald mentioned feed-in tariffs as being key to supporting the development of wind power in the last decade or so.

These feed-in tariffs operated as a guaranteed minimum price system to support the long-term investment in a low-carbon energy supply compared to fossil fuels. So the carbon-efficient alternative was incentivised.

From a dairy perspective the equivalent to the feed-in tariff price support could be a ban on below cost selling of fresh dairy products produced from grass based systems, thereby incentivising Irish dairy with its low-emissions capability.

The reality for dairy farmers and processors is that their product (in the form of liquid milk) has been consistently either sold below cost or as a promotional loss leader over the last 10 years. In parallel the retailer has built its share of own label liquid milk from 40% to nearly 80% market share over this same period.

There is surely a huge disconnect between the increased compliance costs associated with adapting and confirming low-carbon capabilities and a marketplace that not only doesn’t recognise increased costs, but will sell the more carbon-efficient and compliant product below cost.

Market failure

So in contrast to the pro-climate change approach in the energy market we have the current policy vacuum whereby a handful of supermarkets, who control 90% of the Irish grocery market, on the one hand continue to push low-cost milk as a loss leader, while also pushing dairy alternatives at up to twice the price.

The fact that the plant-based products have as little as 20% of the nutrition of fresh milk and dairy products, only compounds how perverse this is. In effect supermarkets are using buying power to commoditise and undermine a natural highly nutritious product like liquid milk while flogging to consumers a manifestly lower-quality product at twice the price.

Supermarket buying dominance through its short-term loss leading price policies is not only killing off the food supply chain, but is killing off access to nutrition and low-carbon intensity food production

The other blow to the dairy supplier is that the plant-based products are increasingly displacing liquid milk in the chill cabinets paid for by dairy suppliers over the years.

This is further evidence that the supermarkets, far from responding to consumer demand and evolving climate change concerns have no notion of incentivising low-carbon, high-compliance products such as Irish dairy’s fresh products such as milk and cheese.

What is clearly demonstrated here is that the supermarkets have no stake in the dairy industry or any other elements of the agriculture sector under either a climate change or access to nutrition basis.

Overall, supermarket buying dominance through its short-term loss leading price policies is not only killing off the food supply chain, but is killing off access to nutrition and low-carbon intensity food production.

Perhaps if citizen’s assemblies and indeed politicians realised that dominant buying power is failing to support low-carbon, compliant food production, there would be less of a call to introduce carbon taxes. And rather than the misinformed calls to penalise Irish farmers, who are the most carbon efficient in Europe, we would be introducing price incentives that are pro-climate change.