Budget 2020 will do little to reassure farmers that their incomes will be protected should the UK crash out of the EU. Just three weeks away from what many now fear could be a chaotic no-deal Brexit, farmers had a legitimate expectation that budget 2020 would provide a detailed plan as to how the viability of their sector would be protected. Instead, what they got from Minister for Finance Paschal Donohoe was simply more comforting words.
As we report, in the event of a no-deal Brexit, €650m will be made available to agriculture, enterprise and tourism. Within this, an initial €220m would be released in the immediate aftermath of a no-deal Brexit. Agriculture is set to receive €110m, with €85m going directly to beef farmers.
At one level, the commitment of additional funding has to be welcomed, albeit that it falls well short of the level required if our agri-food exports into the UK are hit with a tariff wall or left to compete in a tariff-free quota environment with south American product.
The problem is the complete absence of any detail as to the mechanisms that will be used to distribute funding, despite the immediate time frame.
In the wake of how the Beef Exceptional Aid Measure (BEAM) scheme was structured earlier in the year, the promise of funding – in the absence of detail – provides little comfort to farmers. With €20m of what was a €100m BEAM scheme returned to the Exchequer at a time of severe financial hardship on beef farms, serious questions have to be asked of those who designed the scheme.
It is time for the strong commitments of the past to be delivered upon with specific details of what support tools are in place
With BEAM only covering losses on beef farms up until mid-May, the IFA has rightly called on Minister for Agriculture Michael Creed to pay out the €85m announced in Tuesday’s budget to beef farmers retrospectively.
Since May, finished cattle prices have fallen 50c/kg or the equivalent of €150 to €180 per head.
By responding, the minister would show a strong commitment within Government to recognising the financial stress that forced farmers to protest at the gates of beef factories during the summer.
Farmer attention must now turn to Brussels, from where there has been repeated commitments that the European Commission stands ready to protect farmers’ incomes in a no deal-Brexit. As is the case with the Government, the time for comforting words from the European Commission is over. It is time for the strong commitments of the past to be delivered upon with specific details of what market support tools are in place to respond to a no-deal Brexit and the level of funding secured.
We are fortunate that the appointment of former European commissioner for agriculture Phil Hogan to the trade commissioner position provides a level of continuity within the newly formed European Commission.
Hogan’s reassurances
As commissioner for agriculture, Hogan repeatedly reassured farmers that the tools are available to respond to market challenges created by Brexit. As one of the most senior figures within the recently formed college of commissioners, farmers will be looking to him to ensure that these commitments are honoured and that properly funded and designed schemes are announced immediately.
The argument that providing details of support measures would weaken the EU negotiating position is no longer credible. If anything, showing British negotiators that Irish farmers will not be used as political pawns in the negotiation process only strengthens the EU position.
In the wake of an underwhelming budget, Government and farm organisations need to mount a major diplomatic offensive in Brussels over the coming weeks.
The scale of the financial shock that a no-deal Brexit would cause to Irish agriculture and the rural economy will require the EU to contribute a multiple of the level of support that is possible at national level.
In the days ahead, all efforts must be made to lock this funding down and ensure the distribution mechanisms guarantee the money is targeted at protecting farm incomes without restrictive or costly conditions attached.
Tillage: grain farmers at the gates of Glanbia
While the problems in the beef sector have dominated headlines, it is also proving to be a challenging year for tillage farmers.
Perhaps it’s not surprising that farmers are protesting at Glanbia’s gates, but it is troubling. Glanbia Ireland is the largest buyer of grain – and the largest seller of feed – in the country.
Glanbia co-op is the majority shareholder, owning 60% of Glanbia Ireland, with Glanbia plc holding the other 40%. Glanbia Ireland is thus rightly held to a higher standard by farmers than, say, the ABP Food Group.
Ironically, the co-op’s involvement is actually at the core of the problem. On the face of it, the price farmers are receiving is a little shy of the market. The €141/t for feed barley is €2 less than Dairygold is paying. Centenary, which is becoming the Carbery of the grain sector, consistently topping the price league, is paying €4/t more.
The real problem is the Glanbia base price. It is only €128/t, the remaining €13/t is paid to shareholders from the co-op’s funds.
This gives Glanbia a massive competitive advantage over other merchants. That in turn drags the market down towards and even below the Glanbia price.
The model might be working for Glanbia, but it is affecting the market, and may need adjusting.
Beef: prices leave dairy beef unprofitable
HEX by KZP, born 2 March 2018, weighed 504kg live and 265kg dead. Beef price paid €3.85/kg.
Also this week, Adam Woods reports on the first batch of heifers to be sold on our dairy calf to beef farm in Tipperary. The heifers were selected as calves from easy-calving, short-gestation bulls but with superior beef traits. Despite good lifetime performance, the profitability of the system will be challenged.
Low beef prices and light carcase weights see output value struggling to cover production costs. While still at early stages, the project raises serious questions over the viability of dairy beef systems at current market prices, even where the genetics and management boxes are being ticked.
Under Budget 2020, a €10m fund has been allocated to weigh calves. It is a welcome step but caution is needed when encouraging farmers to go down the dairy beef route.
With just four months to peak calving in the dairy herd, time is running out to develop sustainable production models for dairy-bred stock.
Environment: lack of joined-up thinking in carbon tax
Minister for Finance Paschal Donohoe. REUTERS/Clodagh Kilcoyne
The increase in carbon tax in this week’s budget was hardly a surprise. While farmers will be able to claim a rebate on the green diesel hike after it is introduced in May, merchants will not. Will this result in an additional cost on grain drying by merchants?
Ultimately, this is a lost opportunity for joined-up thinking to displace diesel as a fuel for drying and encourage the use of renewable fuels like miscanthus and willow for many in this sector. We aim to decrease fuel usage and yet diesel-fuelled grain dryers are aided by TAMS while there is no support for biomass burners.
Focus: controlling animal feed costs in winter
Heavy rain over the past few weeks has seen many farmers forced to house stock earlier than expected. While grass is still available, in many parts of the country ground conditions are proving difficult.
With housing comes a significant increase in costs. In our Focus supplement this week, Mathew Halpin looks at how these costs can be minimised. Feeding the right ration and at the right level is critical. In most cases, keeping it simple is the best option when it comes to rations with rolled barley underpinning the mix.
Budget 2020 will do little to reassure farmers that their incomes will be protected should the UK crash out of the EU. Just three weeks away from what many now fear could be a chaotic no-deal Brexit, farmers had a legitimate expectation that budget 2020 would provide a detailed plan as to how the viability of their sector would be protected. Instead, what they got from Minister for Finance Paschal Donohoe was simply more comforting words.
As we report, in the event of a no-deal Brexit, €650m will be made available to agriculture, enterprise and tourism. Within this, an initial €220m would be released in the immediate aftermath of a no-deal Brexit. Agriculture is set to receive €110m, with €85m going directly to beef farmers.
At one level, the commitment of additional funding has to be welcomed, albeit that it falls well short of the level required if our agri-food exports into the UK are hit with a tariff wall or left to compete in a tariff-free quota environment with south American product.
The problem is the complete absence of any detail as to the mechanisms that will be used to distribute funding, despite the immediate time frame.
In the wake of how the Beef Exceptional Aid Measure (BEAM) scheme was structured earlier in the year, the promise of funding – in the absence of detail – provides little comfort to farmers. With €20m of what was a €100m BEAM scheme returned to the Exchequer at a time of severe financial hardship on beef farms, serious questions have to be asked of those who designed the scheme.
It is time for the strong commitments of the past to be delivered upon with specific details of what support tools are in place
With BEAM only covering losses on beef farms up until mid-May, the IFA has rightly called on Minister for Agriculture Michael Creed to pay out the €85m announced in Tuesday’s budget to beef farmers retrospectively.
Since May, finished cattle prices have fallen 50c/kg or the equivalent of €150 to €180 per head.
By responding, the minister would show a strong commitment within Government to recognising the financial stress that forced farmers to protest at the gates of beef factories during the summer.
Farmer attention must now turn to Brussels, from where there has been repeated commitments that the European Commission stands ready to protect farmers’ incomes in a no deal-Brexit. As is the case with the Government, the time for comforting words from the European Commission is over. It is time for the strong commitments of the past to be delivered upon with specific details of what market support tools are in place to respond to a no-deal Brexit and the level of funding secured.
We are fortunate that the appointment of former European commissioner for agriculture Phil Hogan to the trade commissioner position provides a level of continuity within the newly formed European Commission.
Hogan’s reassurances
As commissioner for agriculture, Hogan repeatedly reassured farmers that the tools are available to respond to market challenges created by Brexit. As one of the most senior figures within the recently formed college of commissioners, farmers will be looking to him to ensure that these commitments are honoured and that properly funded and designed schemes are announced immediately.
The argument that providing details of support measures would weaken the EU negotiating position is no longer credible. If anything, showing British negotiators that Irish farmers will not be used as political pawns in the negotiation process only strengthens the EU position.
In the wake of an underwhelming budget, Government and farm organisations need to mount a major diplomatic offensive in Brussels over the coming weeks.
The scale of the financial shock that a no-deal Brexit would cause to Irish agriculture and the rural economy will require the EU to contribute a multiple of the level of support that is possible at national level.
In the days ahead, all efforts must be made to lock this funding down and ensure the distribution mechanisms guarantee the money is targeted at protecting farm incomes without restrictive or costly conditions attached.
Tillage: grain farmers at the gates of Glanbia
While the problems in the beef sector have dominated headlines, it is also proving to be a challenging year for tillage farmers.
Perhaps it’s not surprising that farmers are protesting at Glanbia’s gates, but it is troubling. Glanbia Ireland is the largest buyer of grain – and the largest seller of feed – in the country.
Glanbia co-op is the majority shareholder, owning 60% of Glanbia Ireland, with Glanbia plc holding the other 40%. Glanbia Ireland is thus rightly held to a higher standard by farmers than, say, the ABP Food Group.
Ironically, the co-op’s involvement is actually at the core of the problem. On the face of it, the price farmers are receiving is a little shy of the market. The €141/t for feed barley is €2 less than Dairygold is paying. Centenary, which is becoming the Carbery of the grain sector, consistently topping the price league, is paying €4/t more.
The real problem is the Glanbia base price. It is only €128/t, the remaining €13/t is paid to shareholders from the co-op’s funds.
This gives Glanbia a massive competitive advantage over other merchants. That in turn drags the market down towards and even below the Glanbia price.
The model might be working for Glanbia, but it is affecting the market, and may need adjusting.
Beef: prices leave dairy beef unprofitable
HEX by KZP, born 2 March 2018, weighed 504kg live and 265kg dead. Beef price paid €3.85/kg.
Also this week, Adam Woods reports on the first batch of heifers to be sold on our dairy calf to beef farm in Tipperary. The heifers were selected as calves from easy-calving, short-gestation bulls but with superior beef traits. Despite good lifetime performance, the profitability of the system will be challenged.
Low beef prices and light carcase weights see output value struggling to cover production costs. While still at early stages, the project raises serious questions over the viability of dairy beef systems at current market prices, even where the genetics and management boxes are being ticked.
Under Budget 2020, a €10m fund has been allocated to weigh calves. It is a welcome step but caution is needed when encouraging farmers to go down the dairy beef route.
With just four months to peak calving in the dairy herd, time is running out to develop sustainable production models for dairy-bred stock.
Environment: lack of joined-up thinking in carbon tax
Minister for Finance Paschal Donohoe. REUTERS/Clodagh Kilcoyne
The increase in carbon tax in this week’s budget was hardly a surprise. While farmers will be able to claim a rebate on the green diesel hike after it is introduced in May, merchants will not. Will this result in an additional cost on grain drying by merchants?
Ultimately, this is a lost opportunity for joined-up thinking to displace diesel as a fuel for drying and encourage the use of renewable fuels like miscanthus and willow for many in this sector. We aim to decrease fuel usage and yet diesel-fuelled grain dryers are aided by TAMS while there is no support for biomass burners.
Focus: controlling animal feed costs in winter
Heavy rain over the past few weeks has seen many farmers forced to house stock earlier than expected. While grass is still available, in many parts of the country ground conditions are proving difficult.
With housing comes a significant increase in costs. In our Focus supplement this week, Mathew Halpin looks at how these costs can be minimised. Feeding the right ration and at the right level is critical. In most cases, keeping it simple is the best option when it comes to rations with rolled barley underpinning the mix.
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