A GOOD year lies ahead for Irish farmers but increasing costs could temper what might be achieved, according to the Irish Farmers’ Association.
The association’s chief economist, Rowena Dwyer, has said producer prices in 2011 should remain positive, with international demand continuing to aid the recovery evident last year. However, the gains may be offset by increased input costs.
“The weakening of the euro against the dollar, combined with increased global demand for inputs due to rising product prices, restrictions in the supply of fertiliser from key exporting countries and increased domestic taxes on energy inputs, are expected to contribute to an increase in overall farm inputs costs during the coming year,” Ms Dwyer said in an end-of-year report.
In her outlook for 2011, she said a market development which looked likely to continue in 2011 was the move towards providing guarantees on producer prices through market instruments, including contracts, and forward selling.
“This is an attempt to minimise the volatility in farm incomes that has been prevalent in the sector over the last five years. However, similar instruments are not currently available for minimising input cost volatility.
“It is expected that sterling will continue to strengthen in 2011, due to stronger growth in the UK economy, and the possibility of an interest rate increase in the UK resulting from higher than expected inflation.”
She predicted this would be positive for Irish agri-food exports and for agri-food products competing on the domestic market with imports from the UK.
On the banking sector, Ms Dwyer said the proposed restructuring agreed by Ireland as a condition for accessing the EU-IMF fund was likely to result in a significant reduction in size and activity of the Irish indigenous banks.
“However, it is likely that there will be renewed focus on lending to the domestic SME [small and medium enterprise] sector, including the farm business sector, which undertook almost 25 per cent of all new small business lending in 2010.
“Overall, access to funding will remain restricted and expensive for the Irish banks, resulting in further expected increases in the costs of credit for all borrowers,” Ms Dwyer concluded.
This year saw a number of boosts to Irish agriculture, including potato exports to Russia, where harsh weather conditions had damaged grain stocks. Despite very strict regulations on importation of ware (eating) potatoes into Russia, Irish suppliers, who had a bumper crop this year, were able to meet the standards.
The Russian Federation will not accept potatoes from countries where potato cyst nematodes are found. Ireland is clear of this problem. Nematodes are roundworms which can infest plants within the potato family, including tomatoes.
If left uncontrolled, they can cause up to 80 per cent yield loss in potato fields.
To date, five ships have departed Irish ports for Russia carrying potatoes. One has gone from Drogheda, two from Dublin and two from Greenore, bound for St Petersburg. All but one of these has docked and been unloaded.
The total quantity exported to date is approximately 12,700 tonnes. A further 1,000 tonnes of Irish potatoes have been exported on two ships through Derry port.
A large number of containers were also sent to Belgium and the Netherlands for onward shipment to Russia, Department of Agriculture figures show.
It is expected at least another six vessels will leave Ireland from mid-January to supply the market.