Political Inaction Accelerates Cereal Industry Demise – Healy

IFA President Joe Healy has said that political inaction is accelerating the demise of Irish cereal farming, as prices for the fourth successive year fail to cover production costs.

Mr Healy said, “Preliminary sowing estimates for Ireland’s 2016 harvest show a further significant decline in plantings of over 40,000ha since 2012. The spring barley area has been the worst affected with a fall off over 20,000ha since last season. Exceptional grain yields over the last two seasons have failed to halt the decline as farmers struggle to cope with a combination of low grain prices, expensive inputs, falling Direct Payments and increased compliance costs due to greening. In addition, Ireland’s dysfunctional banking system is forcing farmers to pay non-competitive interest rates or depend on expensive merchant credit.

“The EU Commission must move to abolish anti-dumping and customs duties immediately as this would introduce much needed competition into the EU’s fertiliser market which is currently highly protected.

“Fertiliser prices have increased at a disproportionate rate to other inputs and now account for up 40% of variable costs compared to 17% or less 15 years ago. The EU’s Competition Authority must also examine why European farmers are forced to pay significantly more for plant protection products. In addition, greater flexibility must be given under greening to take account of practical difficulties arising from Ireland’s fragmented farming system and moist climate.

“Many Irish farmers are forced to rely on expensive merchant credit because of Ireland’s dysfunctional banking system. The Government must do more to create a properly functioning banking system to give farmers and SMEs access to competitively priced funds. Currently Irish farmers are paying a significant premium for overdraft and term loans, while on the continent many EU farmers can source money at rates closer to 1% to 2%.”