20 SEPTEMBER 2016
By Eddie Punch – ICSA General Secretary
The recent Teagasc survey on farm viability was interesting reading. Only 37% of all farms were viable and only 26% of sheep and 20% of suckler farms. More intriguing was the definition of a viable farm. It was defined as offering a return to labour (i.e. family farm’s own labour) of the minimum agricultural wage and a return on investment on non-land assets of 5%.
Who defines a farmer’s worth at the minimum wage? Look at recent Luas and Dublin Bus strikes. A key tenet of most employment agreements is that in even relatively simple tasks like driving a Luas, higher pay goes with experience.
Throughout the public sector, even if you don’t perform better than you did in previous years, the very fact that you remain on the books entitles you to incremental increases.
Most farmers are far more experienced at their role than the average Luas driver. Yet, it seems that there is no implicit acceptance that a farmer is worth more than the most inexperienced novice seeking employment on a farm.
I was reminded of this again when speaking at Terre 2016 (Agrifood Conference) in France last week when a French farmer in the audience stood up and slated all of the agencies in France. While the discussion was about adding value to French agri-products and the development of the “Made in France” label, this farmer was having none of it.
In a speech that would resonate with farmers throughout Ireland, he said he was sick of everybody else benefitting from his work and risk taking and at a rate of pay far better than he was getting.
By contrast, this sixty year-old with a lifetime of experience was still lucky to make the wage of someone starting out a career in any other sector. He went on to warn the many agricultural students who were at the event to change course before it was too late. Don’t be a busy fool for everybody else summed up his estimation of where farming has come to.
The notable thing about this conference was that the French were very interested in what we were achieving with Bord Bia’s Origin Green. The French are developing their own “Made in France” label amid fears in Ireland that their market is becoming more protectionist. There isn’t a single speech made in France which does not refer to the special high quality of their own product. Much the same as people here saying we have the best beef in the world.
So the phrase running faster to stand still comes to mind. While it would be an act of heresy to question the strategy behind all this added value, one wonders if farmers are getting any real benefit from this.
Particularly when the ingenious marketing concepts invariably involve more hassle and cost for farmers at a time when the aforementioned Teagasc study shows that they don’t have time for this because they need to get busy working two jobs.
Brexit has focused minds on the impact on our most significant export market. The Red Tractor label has been used by British farmers to differentiate their product from all imports. Ireland’s response was to try to keep up by developing an even better label.
However, a fundamental problem is that both the French and the British have large domestic markets and when it comes to it, the real point of differentiation is a call to patriotic duty. All of the rules on movements, residencies and perhaps even on carbon footprint are potentially a vain effort to convince people of something that deep down they place no value on.
Are the people who voted for Brexit because of an innate sense of British nationalism going to be persuaded that Irish beef is just as good as their own or are they going to go to the supermarket that offers them the cheapest food?
In a sense, the problem facing farmers is not dissimilar to the problem facing ordinary people all over the world. The sense of disillusionment and the rising tide of populist movements is testament to the fact that globalisation is not working for everyone. Nobel prizewinning economist Joseph Stiglitz underlined the shortcomings of globalisation in his famous book “Globalisation and its discontents” (2002) in which he argued that the free market economics model was flawed.
While Stiglitz is not without his critics, there is an undoubted ring of truth about the reality that multinational corporations seem to be the greatest beneficiaries of trade deals negotiated behind closed doors. That is why ICSA is putting so much effort into keeping the concerns of beef farmers to the fore at EU level and through media campaigns and national protests, including ones at the Dail and the EU Commission offices earlier this year.
There is little evidence that either CETA, TTIP or Mercosur will be anything other than an unmitigated disaster for EU beef farmers. There are very valid concerns about dispute resolution mechanisms in these trade deals which are built around a lack of transparency and a lack of acceptance for the normal judicial processes.
The food chain is also characterised by a complete lack of transparency on margin except at the bottom of the ladder where the primary producer’s lack of margin is clear to be seen. ICSA believes that regulation at EU level is required to audit what margins are been made and by whom. It is essential that there is transparency about how much money multinational retailers and processors are making off the backs of farmers.
While there can be no doubting that initiatives like “Origin Green” and Teagasc “Better Farm” programmes are valid attempts to improve the odds for Irish food exports and Irish farmers, the impact will at best be marginal and at worst will result in farmers running faster without even standing still.
In the meantime, farm organisations must show zero tolerance for any notion that farming is considered a viable career path at the minimum wage. Moreover, a lot more effort needs to be put into a joined-up approach at European level to force both the EU Commission and national governments to shift their focus away from soft target regulation of the little people and instead to rein in big business. Finally, we are going to have to stop pretending that the consumer is paying too much for quality food. All we are doing is making space for more expenditure on Luas fares and other consumer items.