Sir, – Your editorial "Fairness for farmers" (September 26th) recommends a "fair [price] return" and collaboration between all stakeholders to ensure we maximise the long-term potential of the agriculture sector.
Meat Industry Ireland members support your call for collaboration across the sector. The beef sector in particular, from farm through to processing and export, remains one of the most important indigenous industries in the national economy, supporting in excess of 70,000 beef farmers, 10,000 processing jobs and export earnings in excess of €2.1 billion.
You also refer to a need for a “more equitable relationship and a fair [price] return” between producers and processors. It is often implied that the processing sector enjoys an unfair return. Data published by the Central Statistics Office consistently confirms that the meat processing sector is an extremely low-margin business.
Nevertheless Irish meat processors have invested significantly in modern processing facilities to ensure high levels of efficiencies which allow them to compete on a global basis. Efficiency is a critical factor at all levels of the supply chain.
Our members collaborate directly with their farmer suppliers on a regular basis and with other sector stakeholders through initiatives such as the Better farm programme and through the provision of funding towards meat research, animal health and breeding projects. This collaborative effort needs to be further enhanced through initiatives such as the Beef Roundtable Forum recently established by Minister for Agriculture Simon Coveney, where all stakeholders have the opportunity, at regular intervals, to discuss many items such as beef consumption, market developments, on-farm efficiencies, breeding programmes, margin support measures, etc.
While producers are understandably concerned by the 12 per cent reduction in prices in 2014, beef prices have increased by 40 per cent in the period 2009 to 2013. The weakening in prices this year is due to an increase in production and a fall in EU consumption which is forecast to recover in 2015.
An independent report (the Dowling report) into the beef sector was commissioned earlier this year and was published in June. The report contained many recommendations which warrant active consideration by all parties and all aspects of the report need to be addressed with equal prominence. Meat Industry Ireland, on behalf of the beef processing sector, has issued a comprehensive response to the Dowling report, specifically in relation to the recommendations that required processing industry input. These include a commitment to further improving communications with producers through provision of additional information and clarity on remittance documents; further flexibility with regard to the issue of heavy carcase weights; increased use of supply contracts to provide guarantees to producers who finish animals over the winter period; protocols on the notification to producers with regard to the specifications required by the marketplace; margin and profitability at farm level are critical but very clearly are not solely determined by price. High prices do not necessarily deliver high margins. This is clearly evident from the low producer profitability figures for 2013, which coincided with a record high level of prices for cattle. Therefore the other recommendations in the Dowling report on breeding, on-farm production efficiencies and animal health programmes must also be tackled. – Yours, etc,
JOE RYAN,
Meat Industry Ireland,
Ibec, Dublin 2.