Just in case we thought European agriculture had changed its spots, there is some news out of the Republic of Ireland which has caught Allan Barber’s attention.
The President of the Irish Farmers Association (IFA) has beseeched the Irish Minister of Agriculture to prevent cuts to the prices being paid for beef by the processors. To this point, I have seen no reaction from the Minister, although it’s difficult to imagine he can do very much without contravening the EU’s Common Agricultural Policy which of course will involve farmer subsidies of some sort.
If, as the IFA suggests, there is not enough competition between processors which are not paying full market returns, presumably there is provision in European competition law to investigate and penalise illegal behaviour. Apparently farm gate beef prices have fallen by more than Euros 100 per head in the last month which means farm incomes will drop sharply just in time for the peak autumn kill.
Ireland’s main market is the UK where recent price gains have outpaced the weakening of sterling against the euro which makes it look as though the IFA president has a point when he implies the processors may be guilty of collusion. Of course, that dreaded C word has not reared its head in New Zealand’s meat industry since the early 1990s when surplus capacity resulted in meat processors doing whatever they could to retain a margin, not always successfully.
If the Irish Minister of Agriculture asks questions of the processors, it will be interesting to see what excuses they come up with.