Lack of suckler plan puts sector supporting 52,000 jobs in jeopardy

Over 1,200 farmers are due to attend the Irish Farmers Journal Beef Summit on Thursday night. The level of interest in the event once again reinforces how important the suckler sector is in rural Ireland and the commitment that exists among suckler beef producers.

This is why the Irish Farmers Journal took the decision to invite key industry leaders to Co Galway, home to 10% of the national suckler herd, to outline to farmers their vision for the future of the sector.

With Minister for Agriculture Michael Creed in attendance alongside his most senior officials from the Department of Agriculture, Teagasc and Bord Bia, the event should give farmers not just an insight but an input into the future direction of the sector.

Suckling is a sector that many feel has not only been pushed aside since the abolition of dairy quotas but also unfairly derided in the context of climate change and the lack of profit generated from the production system. This lack of profitability alongside the reliance of the sector on direct payments are often put forward as justification for effectively allowing the national suckler herd wither on the vine.

Ireland is not unique – nowhere in Europe is suckler beef production economically viable in the absence of direct supports

However, Michael Wallace, professor of agriculture and food economics at UCD, will present data at the summit showing just how flawed such a strategy would be in the context of damaging the economic viability of rural Ireland, particularly in western counties.

As Caitriona Morrissey reports, Prof Wallace’s research work shows that, nationally, economic output from the suckler sector is in the region of €3bn annually, supporting the equivalent of 52,000 full-time jobs, both directly and indirectly. If we take Galway and surrounding counties, the annual output figure is close to €700m supporting over 12,400 jobs.

Those quick to dismiss the importance of protecting the future of the suckler herd have yet to put forward a strategy outlining how alternative employment opportunities will be created in these towns and villages. Allowing such an important sector – on which so many jobs are dependent – to simply wither away is not an acceptable approach from Government. Farmers and rural Ireland need a strategy that tackles the serious profitability challenges currently eroding farmer confidence in the sector if current levels of output and employment are to be sustained.

Some argue that the focus should be on demanding that farmers secure a higher percentage of the retail price. While few could disagree with the sentiment, the reality is that a price increase alone will not address the profit challenge facing suckler beef production.

We should not fool ourselves: the reliance of the suckler sector on direct payments is not a new phenomenon. Suckler beef production within the EU has always been heavily reliant on CAP support. The reality is that in the absence of supports, suckler beef production only exists in regions of the world where the cow roams over vast tracks of marginal land, where stocking rates are as low as 1lu/5ha, or in the case of the US, where profitability is underpinned through the use of growth hormones.

Ireland is not unique – nowhere in Europe is suckler beef production economically viable in the absence of direct supports. This is why we see member states targeting over €1.7bn per annum into direct payments, the vast majority of which are targeted towards their suckler sectors.

In contrast, many suckler farmers in Ireland have seen the level of support decline in recent years. The publication of modelling work carried out by the Department of Agriculture detailing the movement of support across sectors would help inform the debate. It is unfortunate that the minister is refusing to make this information available.

While often complicated by politics, the reality is that the debate around the future of the suckler herd is straightforward. There are really only two options: maintain the status quo and allow a sector that is supporting over 52,000 jobs in some of the most disadvantaged parts of rural Ireland slowly wither away; or we recognise that even the most efficient suckler beef production systems in the EU are not profitable in the absence of targeted supports.

This presents a straightforward decision for Government. If they accept the value of the suckler sector to rural Ireland, they must also accept the need for more targeted supports to address the very obvious income challenges.

At the end of last week, what can only be described as a horrific video was released showing the brutal treatment of calves by an individual in a lairage in Cherbourg, France.

Like most farmers, I could not bring myself to watch the clip in its entirety, such was the disgraceful manner in which young calves were being handled.

As Thomas Hubert reports, French prosecutors have confirmed to the Irish Farmers Journal that the individual identified in the footage has since been arrested. In this sense, release of the footage has done our sector a service by ensuring that this type of activity is not viewed as acceptable.

While much attention has focused on the fact that the calves were being exported, it is largely an irrelevant issue. The problem is not live exports – it is the fact that the wrong type of individual was allowed to handle animals.

Whether in a lairage in France or a mart in Ireland, we must have a zero-tolerance approach to poor animal welfare standards. While farmers have an important role to play in this regard, responsibility extends right across all stakeholders, including marts, meat factories, licensed hauliers and live exporters.

In the case of marketing and transportation of livestock, both hauliers and agents must ensure that welfare of animals under their care is at the highest standard at all stages in the process.

Turning a blind eye to such issues only allows isolated incidents – as recorded in France – to shape consumer perception of our industry, no matter how unrepresentative it may be. The Department of Agriculture was right to condemn the ill treatment of livestock and highlight the control measures in place.

Anxious dairy farmers gathered at an IFA meeting in Meath on Tuesday ahead of farmer co-op boards setting April milk price next week. Given the typical supply profile, it is clear why March, April and May milk price is so important for dairy farmers. Milk prices from October to January don’t have as much impact on dairy farmer output values.

Two items deserve attention this week. The 11th consecutive rise in the New Zealand dairy product auction price as dairy farmers there dry off cows. This GDT result coupled with no major imbalance in dairy market supply and demand should give co-op boards the confidence to lift price for those processors in the lower levels and allow those at the top hold price.

There seems significant discontent at the model used by some processors for incorporating trading bonuses, VAT, shareholder dividends, etc, into monthly milk prices. Board members need to make their voices heard.

Elsewhere this week, Paul Mooney looks at the challenges facing livestock marts. Many find themselves squeezed by rising costs and falling throughput. Any business can only defy the laws of gravity for so long. The collapse of Castleblayney Mart demonstrates the impact on farmers when the road finally runs out.

The role of the livestock mart system is too important for the industry to simply ignore the issues. We have to question if a network of 88 marts is in fact one of the biggest threats to the future of the livestock mart system. However unpopular, rationalisation is a thorny issue that will have to be tackled at some point.

The National Broadband Plan was approved this week. We cannot look beyond how important this piece of infrastructure will be for rural Ireland and farmers. Farmers are increasingly dependent on good connectivity when running their businesses. Is it a pre-election promise or a real commitment? Time will tell.