Farmers say rising costs throwing agri-food into crisis

Posted by Jim on November 26, 2012  /   Posted in Blog

Country Tyrone pig farmer James Millar has had a difficult decision to make – to keep his stock, and continue to lose money, or shut up operations entirely.

These pigs were all that remained of what was until recently a herd of 700.

Their final journey, to the abattoir, marked the end of a near 20 year investment in breeding sows. It was too expensive to keep them.

James Millar’s profits had been wiped out and the economics simply didn’t make sense.

“You would need about £135 per pig and we are only getting £115, £120,” he says.

“Every animal going out through the door is losing you money.”

The agri-food sector is a priority for the Stormont Executive. It sees great potential in the farming industry and has set up a strategy board to secure its future.

Farming is in crisis, says Thomas Gilpin But the mood in the farming community is bleak. It is not just a question of a bad summer in which fields went unplanted. One sign of the times is that potatoes are now being imported here.

Thomas Gilpin supplies vegetables to some of our big supermarkets here – he is clear on the economic picture for farming right now.

“There is a crisis,” he says.

“Everybody involved in the sector at the moment from the grower right through to the washer and packer like ourselves, right through to the man making the preparation of it all, nobody is making any money, in fact everybody is losing a lot of money at the minute.”

In the cattle sector, animals have been brought into the barn much earlier than usual. They are already being fed on expensive fodder intended for the winter, a result of the impact the wet summer had on grazing land.

And weather conditions overseas have had an effect too. Imported grain is now at a premium price, with animal feed costs up significantly on last year.

While meat prices may have risen at the farm gate – that’s the price a processor pays the farmer for his cattle – this has been cold comfort for farmers like Ray Elkin.

His complaint resonated across the sector. Farmers like him maintain that high costs are obliterating what little profit may have been available to farmers lately.

As a result many say they are simply not even getting the cost of production from processors and retailers. Simply put, they are losing so much money on each animal that their futures are in doubt.

The Ulster Farmers’ Union says that, worse still, while farmers across the UK are suffering, our local meat producers are getting even less than their counterparts in Great Britain.

As a result, they say, Northern Ireland’s economy is losing out to the tune of £1m a week in the difference in prices paid to farmers there compared to England, Scotland and Wales.

High costs are obiterating profit say farmers like Ray Elkin With over 70% of Northern Ireland’s produce intended for the export market, new opportunities abroad are critical for the growth of the agri-food sector.

The Minister for Agriculture, Michelle O’Neill, insists that steps are being taken and has just returned from a high-level trade mission to China, aimed at boosting the sector.

The delegation included the First and Deputy first Ministers and the Minister for Enterprise, Trade and Investment. Clearly, new export outlets are being sought by the Executive.

But it is the key issue of price, the money the farmer gets from the processor and the supermarkets, that is at the heart of the issue for those working the land.

A new Agri-Food Strategy Board established jointly by the Department of Agriculture and the Department for Trade and Investment will not be addressing this thorny issue of price.

BBC NI’s Spotlight programme put the concerns of those farmers to the minister.

She said that while it was beyond the remit of her board, she would continue her discussions with the big supermarkets to secure a fairer deal for the farmer.

“Pricing is beyond my remit. But what I can do is the practical supports that I can bring to the table in terms of supporting farmers to look at benchmarking.

“Are they producing most efficiently? Is there any way they can drive out some of the costs that they have?

“Hopefully in the longer term farmers will be producing in the best manner in which they can, the most efficient manner in which they can.”

Many predict major change in the industry.

Northern Ireland can boast world-class produce, but processors pointed out to us that costs may always be higher here than elsewhere in the UK – we are at a geographical disadvantage and this incurs extra transport costs.

The agri-food strategy aims to secure farming’s future and looks ahead to the year 2020.

But with some statistics suggesting an average of at least one farm closure every day for the last number of years, many farmers fear the industry will not survive as they know it.

About Jim

James is a director with JCR Network Services Ltd, which provides sales, marketing and business development expertise to local SMEs in Ireland and the UK. Many businesses have developed their growth strategies through our focussed actions. We specialise in helping the agri-food , emerging technology, manufacturing and services sectors.

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