“Is there a credible economist who can stand over the assertion that farmers should not have choice in the matter of cattle tag supply?” – Patrick Kent, President, ICSA.
DEAR SIR: Derek Deane sees vested interests in the ending of monopoly for cattle tags (IFJ letters, 6 August) whereas most economists would see monopoly as the typical outcome of vested interests influencing a market. He tries to make the bizarre case that monopoly is in the best interest of the consumer when it comes to cattle tags. What school of economics supports this notion? Is there a credible economist who can stand over the assertion that farmers should not have choice in the matter of cattle tag supply?
It is as if someone was to object, twenty years ago, to Ryanair getting up and running on the basis that consumers couldn’t afford to carry the cost of Michael O’Leary buying another fleet of airlines when Aer Lingus had a perfectly good fleet already. Unlike air travel, the costs of multiple suppliers is a few computers, a bit of software and a few extra phone lines. In terms of cost to the farmer, two staff in two companies is much the same cost as four staff in one company. There may actually be greater efficiencies in terms of keeping staff gainfully employed in existing sheep tag companies. In fairness to Mullinahone, they have been careful to avoid fleecing customers and have provided an efficient service. If they continue to do this, they have little to fear from competition.
However, in the interests of openness and transparency I want to state very clearly that ICSA has been fully in favour of competition for tags. We believe that this is the best way to ensure that there is ongoing product development and ongoing pressure to cut costs so that farmers get the best deal. Apart from the cost of buying the tags for new calves, farmers also face cost in terms of having to pay for replacements and the risk of penalties associated with missing tags.
The best way of ensuring that farmers’ interests are protected is to have choice and then we can decide for ourselves the best option in terms of price, quality or service and which tag delivers the lowest loss rates.