It is difficult to see how the conclusion of last night's beef forum represents anything more than another sticky plaster for our beleaguered beef sector.

Reading down through the list of compromises reached, it is clear that the agenda was focused more on delivering a politically acceptable outcome rather than one which would actually tackle the real issues - removing barriers to competition and delivering real transparency.

Probably the best example of politics triumphing vision/leadership is the agreement to pay a Quality Assurance (QA) bonus on all steers and heifers. While a move that will no doubt have mass appeal, it is difficult to see how it can be seen as progressive.

Given that the agreement is secured on the basis of cost neutrality, the cost will effectively be carried by those farmers that were producing carcasses that ticked all the boxes in relation to what was an In-spec bonus, not a QA bonus. I am not actually aware of any other sector where there is a premium paid solely for QA status.

I imagine factories were quite content for this topic to absorb much of the time around the negotiating table - after all it will cost them nothing.

A SIDE SHOW

In many ways the QA bonus, weight limits, movements etc are a side show. All relatively minor issues when assessed in the context of the lack of farm profit in beef production.

One thing we should have learned from developments this year is competition is fundamental to price. Niall Browne, Dawn Meats, made no secret of this when at the ASA conference he predicted higher prices next year on the basis that supplies would be tighter.

In the spring when the supply and demand balance was in the processors' favour, we saw ruthless enforcement of specs. Immediately when the balance swung back in favour of the farmer, the specs were gone.

Factories that were taking the stage at farmer meetings in the spring and advising castration on the basis that bulls would never again be wanted were, within months, targeting farmers with heavy bulls to sell. The 40-50c/kg penalties that were a so-called reflection of the market in the spring no longer being discussed.

SPEC AMNESTY

It is no surprise factories have given a 12-14 month amnesty on many of the spec issues imposed in the spring of this year - the reality is that they wouldn't have been in a position to impose them anyway given the reduced kill projections for next year. I have yet to see a time when specs were an issue in a rising market.

It is clear that specs follow supply and demand. When competition for finished cattle is weak, specs are enforced to drive down price. On the flip side, when supplies are tight, specs are ignored to control the upper price for premium animals. The trend in farm gate prices during 24 month period spanning horse meat is a prime example of why this debate should have been focused on competition and transparency rather than just specs.

While the intervention of the Competition Authority just before Wednesday's Forum was at best unhelpful, it was again nothing more than a side show. Minister for Agriculture Simon Coveney is a much too competent operator to get dragged into negotiations around an area where his Department can have no direct influence.

REMOVE BARRIERS

However, where farmers should force the Minister to engage the full capacity of his Department and that of Bord Bia is in removing barriers preventing competition in the market. While the Minister's excellent work in developing the Chinese market should be applauded, the fact he continues to ignore the potential of developing a live trade to Britain has to be questioned.

He has made no secret of the fact that he is not a fan of live exports and that he would prefer to add value at home. No one can argue with the aspiration but the market reality is very different. For a Minister utterly committed to sustainability, it is not tenable to maintain jobs on the back of a loss making primary production base.

Live exports are a critical component to competition given its obvious impact on the supply and demand balance. Projections by Bord Bia that prices will be strengthened are based on nothing more than the fact that we had a strong live export trade in 2013.

Given the potential dividend from developing a live trade to Britain, it is simply not acceptable to buy into the processor and retailer contrived argument that there is no label for Irish-born, British finished steers.

PRICE DIFFERENTIAL

The extent to which this argument is a fallacy became clear when the meat industry attempted to justify the Irish and British price differential on the basis that just 15% of our beef exports end up on the British retail shelf. A declaration that clearly shows the vast quantity of Irish beef sales in Britain are sold through a food service market where the labelling issues around imported stock would not pose a barrier.

It appears that the Minister and Bord Bia are being overly influenced by the industry on this issue. Why have we not yet seen Bord Bia commission independent consumer research to ascertain the views of the British consumer/market towards Irish-born, British finished cattle?

We continue to accept retailer research that has an obvious commercial bias. Is the reason due to the fact that despite the potential of the trade to deliver real competition for farmers, the Bord Bia budget for the British market is just €400,000 or just 40% of that spent in Germany.

Meanwhile the Minister has made no attempt to engage publicly with his British counterpart on the issue.

TREAD CAREFULLY

We accept that both the Minister and indeed the IFA need to tread carefully on the issue given the importance of the British market for fresh Irish beef. However let us not fool ourselves, the reason why the British market takes over 50 percent of our total exports is because of the standards to which it is produced, availability of supply and perhaps more importantly, the price at which Irish beef is available. However, it would be foolish to think that in a environment of flat area-based payments that Ireland will continue to feed Britain at a loss.

More direct and robust engagement is needed at all levels on the issue. We should not be afraid to highlight what is effectively a British free trade barrier at European level. It is worth noting that British beef exports to Europe year-to-date have exceeded 70,000 tonnes, with Ireland one of the main export destinations.

NORTHERN EXAMPLE

For anyone in doubt of the impact that gaining access to the British market for live cattle would have on price, they only have to look to Northern Ireland. In recent months just the threat of finished cattle going to Scotland from NI for slaughter lifted the price by over 30c/kg within a period of just two weeks.

For the British farmer that fears Irish live exports would crash the domestic price, again the NI example is valid. The stronger prices in NI helped maintained the British price, not erode it. British farmers have nothing to fear from Irish beef imports. However, they should fear cheap Irish imports. Unfortunately no one is selling this message.

ROBUST MEASURES

Back to the forum and one positive that has come out of it is the commitment that the Department will put in more robust measures around carcase trim and grading. Such a move has long been called for and should not have necessitated such a public forum for it to be agreed. However, more detail is needed.

The IFA needs to demand that the process is fully transparent and any deviation or breaches in relation to trim, weights and measures and grading are made public to farmers. As a sign of commitment breaches which were identified over the past year should be released respectively.

Throughout the process, the Minister has placed a lot of emphasis on the formation of producer organisations. Again a logical move but given the sole trader focus at farm level, practical application will be somewhat more challenging.

One could argue that we already have an excellent producer group concept in the form of co-op marts. The model has served farmers well as a means of inter trading stock but has been shut down by processors as a means of trading fat animals.

Despite common practice throughout Europe and indeed Britain, Irish factories have used specs to penalise farmers from using the live trade as a transparent means of selling fat stock. Addressing this roadblock has the potential to offer farmers similar benefits as the formation of producer organisations.

HIGH-RISK STRATEGY

Meanwhile, the current standoff has now descended into a situation where the IFA has given the industry 24 hours to increase price. It's a high risk strategy given the farmer view is that factories are currently under paying to the tune of €1/kg. What differential will farmers accept with the British market? While the outcome will be watched closely, it only marks a point in time. For us to have a truly sustainable industry we need to get the real issues onto the table and short term politics off it.