Farming a welfare scheme or viable business?

ninty9er

Min wrote: »

The question is do Europeans want food security?

Food security isn't going to be an issue, as nobody here is advocating we stop producing. The argument here is smarter, more efficient production on a larger scale, that is economically viable.

So, the question is do Europeans want to perpetuate outdated farming traditions to get food that's produced inefficiently in Europe, or doe they want their tax money spent on infrastructure and a small level of intervention.

80% of Irish EU budged receipts are spent on CAP. Averaged over the 35 years since 1973 the equates to
€48bn being spent on IRISH agriculture subsidies, without any mention of anything the state may have added. As I've already stated, I'd much rather balanced regional development, a Western Rail Corridor, a proper motorway network than a subsisied farming industry.

I'm not advocating that no support be made available to the farming industry (and it is an industry not a community despite all that IFA sh1te), I just see no benefit in supports being made available in excess of what other industries get.

Take a look at this



Irish farming is significantly oversupported by CAP.

elpresdentde

nesf wrote: »

Really? That would really make me question the study. Those kinds of rates just shouldn't happen outside of very small clusters (i.e. the stats could have been correct but the sample so small to artificially inflate the numbers). 1/2 in 10 schizophrenia rates isn't a raised rate, it's incredibly high to the point of near impossibility for any large population.

nesf wrote: »

Really? That would really make me question the study. Those kinds of rates just shouldn't happen outside of very small clusters (i.e. the stats could have been correct but the sample so small to artificially inflate the numbers). 1/2 in 10 schizophrenia rates isn't a raised rate, it's incredibly high to the point of near impossibility for any large population.

its even more cast in to doubt as the reason that she finds responsible for those mental health figures is a matricidal society (due to male emigration)and being sexually drawn towards female members of their own family as efla already hinted at

nesf

elpresdentde wrote: »

its even more cast in to doubt as the reason that she finds responsible for those mental health figures is a matricidal society (due to male emigration)and being sexually drawn towards female members of their own family as efla already hinted at

Well, then it can be thrown in the bin tbh. Was it a psychiatrist or an anthropologist who did the research?

The_Conductor

Look- the elephant in the room is that it costs a farmer on average between 22 and 23 cent to produce a litre of milk. Farmers are in turn reimbursed between 15.8c and 21c (depending on processor, quality and a lot of other factors). So the farmer is on average loosing between 2 and 7.2c per litre on milk production.

Meanwhile- consumers are paying (after the latest reductions) ~78c a litre (on average again).

The difference between what a farmer gets and a consumer pays is almost 60c a litre.

We have breakdowns from the cooperatives and processors and can see exactly where they have 'added-value' to the end product. They tend to be operating on ridiculous wafer thin margins- this indicates the markup is at the retailer.

The multinational retailers operating here have studiously refused to release seperate breakdowns for their Irish operations- though they have on the record acknowledged that their Irish grocery operations are 'standing up robustly in comparison to similar operations in other geographical locations' (Luc Vandevelde- Chairman of Marks and Spenser). I can't even find a simple statement like this for Tesco.......

There is a disconnect between producers and consumers- its the retail chains- and its where the lions share of a consumers money is going- not to the primary producers or where the money might traditionally have gone (the secondary processors).

This disconnect has gotten ever more stark in nature following the abolition of the groceries order- and is squeezing both farmers and processors as they have never been squeezed before. Ireland will not a vibrant farming community- nor will it have upstream jobs in processing our high quality foodstuffs- unless everyone at each stage in the chain is able to make a living from it.

While I disagree with militarism on a matter of principle- there is a massive issue with the power the retail chains have- and there is precisely no intelligent suggestions doing the rounds as to how to address this structural imbalance.

Do we want to be like England where a significant amount of their milk has to be imported- as large numbers of their dairy farmers have been driven out of business by unreasonable demands by the retail chains? I would willingly pay an extra couple of cent for a fresh litre of Irish milk in a shop- than a 2 day old litre of otherwise perfectly acceptable Eastern European milk (yes- I am the guy who rummages to the back of the shelf for the freshest produce!!!).

We have a serious problem- farming is a perfectly viable business proposition in most instances- its the retailors who are sandbagging both the producers and the consumers- and keeping mightily quiet about what they're doing.......

RedPlanet

originally posted by Tippman
Also we have seen the irish government in action over the last 10 years and how many billions have they wasted. There is absolutley no evidence to suggest that if money from CAP was used to build roads rail whatever that ireland would be 1 bit better off, in fact it would only have contributed further to the ridiculous building boom of the last 10 years.

I can't believe you're trying to float this as a serious reply.
Do you really believe, that it's better that the 48bn charity we've received from the EU is best spent propping up an non-viable farming industry?
I hate our government as much as anybody, but there ARE infastructure projects completed that have benefited us greatly, cheifly motorways and LUAS.
Giving all this money to farmers just to prop up their lifestyle choice inspite of the realities of the market is absurd.

BTW, regarding our quality irish beef, didn't we have the 2nd highest BSE rate in the EU, next to England?

Macha

RedPlanet wrote: »

Giving all this money to farmers just to prop up their lifestyle choice inspite of the realities of the market is absurd.

Seriously, whatever about the arguments on either side, to keep calling farming a "lifestyle choice" is pretty insulting to the thousands of farmers who are struggling to make ends meet.

Tipp Man

ninty9er wrote: »

Capital is a one off cost, therefore has a very long payoff period. If you are in fact a farmer, I would suggest you talk to a business consultant, because your understanding of business is quite poor based on that statement.

Fixed costs decrease per unit added, as do labour costs until enough units are added to require an extra pair of hands. Variable costs like grain and fertiliser will increase, but stay static per unit.

The overall result is more money left once the bills are paid.



Maybe those who have no value on money should get an idea of how the rest of the country lives.


ONLY...You can't be serious opening that sentence with the word only.


Environmental sustainability can be managed quite well. There's whole PhD courses on it. Contact a research PhD student in the area, who I'm sure will give you many, many different options. There are solutions to every problem if only people would be open to them.


Irish farmers could cut milk production, they just can't exceed their quota...that's what quotas are!


And people wonder why small businesses the country over are going out of business. It's not because people like me have new ideas for them, it's because the people that own them refuse to change to facilitate the modern marketplace.

itsallaboutheL wrote: »

There are so many variables that you are never going to understand, i actually have a pain trying to work out the best way to go about disproving your arguement.

Do you have any concept of what is required to significantly increase a Dairy Herd??

Thats the problem L, he has no clue how it works but has plenty to say for himself.
Firstly lets dispel your fixed cost arguement, lets take a 50 cow herd on 50 acres, he's been at it a while so has no borrowings. So he buys 50 acres to increase his herd to 100, cost say 500k (would have to be beside him), he then needs extra sheds and probably new parlour another 120k, so thats 620k which needs to be repaid. Now from a position where he had no borrowings he now has to repay 620k, in this situation how has his fixed costs NOT increased?? please explain. (Look whether a cost is fixed or variable (assuming produciton) it still needs to be paid for, simple fact)

Secondly having expanded from 50 to 100 cows the farmer needs to hire additional labour (none in past) so his labour costs have increased from zero per unit to whatever. Also I don’t know if you have any clue how a cow works but the grain (concentrates)/fertiliser point is completely wrong. On your average herd once you get over about 1200 gallons a cow these cost increase exponentially meaning your cost per litre for these items increases

Thirdly don't for 1 second think that financial consultants are some kinda whizz kids, in practice a lot of them have no idea how to run a business they are simple number crunchers, simple example my sister in law runs a shop her consultant told her to stop selling fags (could have been newspapers can’t remember exactly but it was something like that) as she was not making any money on them, good accounting advice but very poor business advice as a lot of people while buying fags will buy Coke or chocolate or whatever which have large mark ups, so you need to sell the fags to get people in to buy your profitable products (loss leaders if you will) otherwise they go elsewhere and you’ve lost their business forever. Now tell me how that was good advice??

Ronan|Raven

My little contribution to this thread and I admit to not having read it all ( I will do during lunch I promise!) I work in a business tied into the agricultural sector. The situation with REPS is going to have a knock on affect to numerous industries here in rural Ireland, from the coops to the companies manufacturing items such as sheds and farm related equipment.

The complete and utter mess that was the recent grants scheme for Waste Management is already hitting the farm manufacturing industry very hard. The disaster that is the repayment of grants now being spread out over three to four years is going to cause huge problems. Smaller jobs that would normally have been done this time of year such as reroofing buildings, production of new buildings are all well down.

Also if agriculture in this country changes in terms of the levels of livestock slaughtered etc it will have a massive knock on effect. I look at the Avonmore factory 5 miles from in Ballyhaunis County Mayo where do you send all the people employed there if production ceases. Another run on the already crippling dole queues.

I know my points are easily picked apart but it just one persons view from what they see. Also I am not a farmer

Tipp Man

Min wrote: »

Back in the 80's farmer gets 21 cent a litre - milk in shops a lot cheaper
Today farmer gets under 21 cents a litre - milk much more expensive in shops.

It is not the farmer who will get a higher price, in fact milk prices would not increase, you have to look at the global price for milk, it is on the floor right now.

Where is the likes of Tesco or other big supermarket chains handing back more to producers?
They just pocket it all, you have too much trust in the system. Farmers are at the bottom of the food chain.

And that is the crux of the matter, its the retail chains that are ruining it.

Tipp Man

Min wrote: »

I agree they should, or if they are employed by the state they should look to earn the average income of a farmer.....

Maybe they are being paid by the tax payer for their job or in an IDA job that was created by a subsidy to the company employing them.

This is from the Oireachtas 11 years ago - Over £18 million is spent every day by IDA Ireland supporting companies in the economy, which is the equivalent of over £6 billion per annum.

How it changed over the years I do not know but do people in towns or cities who work in companies supported by the IDA not think they are in fact receiving a subsidy from the taxpayer through their employment at an IDA backed company?
For the 6 year period 1999 -2005 the cost per IDA job was 13,229 or the cost to the state of over 1.7 billion
http://www.idaireland.com/news-media/publications/annual-reports/accesible-versions/IDA_AnnualReport2005_Delivered_1stAug06/statistics.html

Agriculture doesn't cost the state that much for a similar number of people employed directly as farmers. Should we remove the IDA subsidy and send those jobs elsewhere afterall it something like beef production needs subsidies wouldn't it be better to get that Brazilian beef, they don't have our high standards and they can cut down some forests but its better than a subsidy for the Irish farmer, right?
Same for your average IDA backed company, lets get rid of them and along with former farmers who we think should get no subsidy.
Lets puts another 300k to 500k people more on social welfare, its what the country needs, more social welfare, less subsidies....

This is a great post, backed up by numbers. Now who was saying that no other industry in the country gets subsidies??

From what i can see anyone that is arguing against the subsidies has no back up to what they are saying, or even giving simple numerical examples? (by the way as i have said countless times i am not in favour of subsidy but i do want farmers to be paid a fair price)

Tipp Man

turgon wrote: »

No I understand pretty well. You want people to pay for things they have never and will never use under any foreseeable and imaginable circumstance. And, seems as you mentioned it, my mother is also coeliac so shes allergic to wheat and she generally eats imported bread. So shes paying for something again that she will never use.

But I suppose she benefits because society benefits, right?

I think we can all be rest assured Tipp Man wont listen to anything we say in any case. Myself, nesf, ninty99er and donegalfella have all tried to use economic arguments but alas, farming is "different." Thus is the economics book once again swept under the carpet. Not of course that we will be informed why economics wont work here. We must simply accept that it wont work. Its a pity that debates about economics so routinely dismiss said science.

Look the fact of the matter is that people paying taxes often have absolutely no need for some of the items they are spent on but it is the government that decides it, spending on agri is the same as spending on health, education, roads etc. Not everyone uses them but they are seen as items that the government has to invest in.

As regards my arguements i have given plenty of numerical examples of how things work in reality, stats from the department of agriculture etc but i have seen nothing but general economic statements (some of which are rubbish) from the other side

Just for your info economics isn't the be all and end all and quite often is just plain wrong, i should know i spent long enough studying it

Tipp Man

Ronan|Raven wrote: »

My little contribution to this thread and I admit to not having read it all ( I will do during lunch I promise!) I work in a business tied into the agricultural sector. The situation with REPS is going to have a knock on affect to numerous industries here in rural Ireland, from the coops to the companies manufacturing items such as sheds and farm related equipment.

The complete and utter mess that was the recent grants scheme for Waste Management is already hitting the farm manufacturing industry very hard. The disaster that is the repayment of grants now being spread out over three to four years is going to cause huge problems. Smaller jobs that would normally have been done this time of year such as reroofing buildings, production of new buildings are all well down.

Also if agriculture in this country changes in terms of the levels of livestock slaughtered etc it will have a massive knock on effect. I look at the Avonmore factory 5 miles from in Ballyhaunis County Mayo where do you send all the people employed there if production ceases. Another run on the already crippling dole queues.

I know my points are easily picked apart but it just one persons view from what they see. Also I am not a farmer

I'm afraid that when you read through the thread you will find that most people won't even acknowledge the effect that farming has on other areas and won't acknowledge the employment that it creates. Instead you'll see something like well only 1 of my friends is involved in agriculture so it can't be that important.

You have raised some excellent points which i hope aren't wasted on here

edanto

The point above about the retailers is very strong.

If the farmers got a fair price for their produce, then the subsidy scheme might not be so necessary.

But farmers have not grasped how to influence the price that they receive. They are not organised when it comes to selling via co-operatives, and the large retailers can play one supplier against another and determine the price.

Because of that weakness, it seems like the farmer lobby take the next easiest option, which is to campaign for subsidies and they have been very successful in doing that.

If subsidies/intervention are to be removed, then we have to be careful not to replicate the sugar beet situation of a few years ago, where the intended beneficiaries were poor overseas sugar cane producers, but the actual beneficiaries were large agricompanies.

Farmers need to be able to force the large retailers to give them a fair price. At the moment it seems like the retailers are getting something like 60% of the retail price, and all they do is accept a delivery, store and stock it - which is nothing compared to the work that goes into producing the milk.

If I were a farmer, I would get more involved with my co-operative or processor and try and find out why they are weak when it comes to negotiating a good price. Are they just rubbish at negotiating? Do they need to be bigger? Should some co-operatives merge to be stronger? This debate needs to look at the hidden profits.

Follow the money, solve the problem.

astrofool

Does anyone know what the cost Tesco/Dunnes/Superquinn pay for the milk is? Do they not sell milk as a loss leader ever?

I'd be surprised if the margin on milk, was the same as say, crisps (~40%).

Did the farmers not sell out of their last cooperative effort? (much more information on this here: http://www.boards.ie/vbulletin/showthread.php?t=2055537263)

edanto

In Ireland, confidential industry sources said that a litre of milk now costs €1.15 in the shops, farmers are paid 22c, the processor gets 43c and the supermarket is taking 50c

Source - http://www.independent.ie/business/irish/consumers-lose-out-as-big-stores-cream-it-on-prices-1838243.html

So, it seems like the retailers are getting ~40% of the price (my estimate above was way off). Still - it's hard to see how they add that much value just by bringing it the final furlong. I still think that the 'Tesco slice' of the pie is the best one to target for farmers looking to make a living.

Subsidies can't continue for farming, that's just the way things are changing. Find something else to do with the land.

Tipp Man

smccarrick wrote: »

Look- the elephant in the room is that it costs a farmer on average between 22 and 23 cent to produce a litre of milk. Farmers are in turn reimbursed between 15.8c and 21c (depending on processor, quality and a lot of other factors). So the farmer is on average loosing between 2 and 7.2c per litre on milk production.

Meanwhile- consumers are paying (after the latest reductions) ~78c a litre (on average again).

The difference between what a farmer gets and a consumer pays is almost 60c a litre.

We have breakdowns from the cooperatives and processors and can see exactly where they have 'added-value' to the end product. They tend to be operating on ridiculous wafer thin margins- this indicates the markup is at the retailer.

The multinational retailers operating here have studiously refused to release seperate breakdowns for their Irish operations- though they have on the record acknowledged that their Irish grocery operations are 'standing up robustly in comparison to similar operations in other geographical locations' (Luc Vandevelde- Chairman of Marks and Spenser). I can't even find a simple statement like this for Tesco.......

There is a disconnect between producers and consumers- its the retail chains- and its where the lions share of a consumers money is going- not to the primary producers or where the money might traditionally have gone (the secondary processors).

This disconnect has gotten ever more stark in nature following the abolition of the groceries order- and is squeezing both farmers and processors as they have never been squeezed before. Ireland will not a vibrant farming community- nor will it have upstream jobs in processing our high quality foodstuffs- unless everyone at each stage in the chain is able to make a living from it.

While I disagree with militarism on a matter of principle- there is a massive issue with the power the retail chains have- and there is precisely no intelligent suggestions doing the rounds as to how to address this structural imbalance.

Do we want to be like England where a significant amount of their milk has to be imported- as large numbers of their dairy farmers have been driven out of business by unreasonable demands by the retail chains? I would willingly pay an extra couple of cent for a fresh litre of Irish milk in a shop- than a 2 day old litre of otherwise perfectly acceptable Eastern European milk (yes- I am the guy who rummages to the back of the shelf for the freshest produce!!!).

We have a serious problem- farming is a perfectly viable business proposition in most instances- its the retailors who are sandbagging both the producers and the consumers- and keeping mightily quiet about what they're doing.......

Good post SMc, you are correct in nearly everything you say

Just 1 little thing, milk in shops is actually 1.15 to 1.20 not 78c, which only exasperates your point, so the gap from producer to the customer is about EUR 1, staggering really

roosterman71

Tipp Man wrote: »

Good post SMc, you are correct in nearly everything you say

Just 1 little thing, milk in shops is actually 1.15 to 1.20 not 78c, which only exasperates your point, so the gap from producer to the customer is about EUR 1, staggering really

Where are people getting 1.15 to 1.20 for a litre in shops? Are ye talking about corner shops, or supermarkets. In supermarkets, the price is generally around €1.50 for 2 litres

Tipp Man

edanto wrote: »

In Ireland, confidential industry sources said that a litre of milk now costs €1.15 in the shops, farmers are paid 22c, the processor gets 43c and the supermarket is taking 50c

Source - http://www.independent.ie/business/irish/consumers-lose-out-as-big-stores-cream-it-on-prices-1838243.html

So, it seems like the retailers are getting ~40% of the price (my estimate above was way off). Still - it's hard to see how they add that much value just by bringing it the final furlong. I still think that the 'Tesco slice' of the pie is the best one to target for farmers looking to make a living.

Subsidies can't continue for farming, that's just the way things are changing. Find something else to do with the land.

roosterman71 wrote: »

Where are people getting 1.15 to 1.20 for a litre in shops? Are ye talking about corner shops, or supermarkets. In supermarkets, the price is generally around €1.50 for 2 litres

Read the Indo link in the above attachment, or just go to your nearest supermarket at lunch, it is in the 1.15-1.20 per litre price range. Just to clarify this i signed up for SuperQuin on-line shopping, 1 litre of Avonmore is €1.14, 2 litres are €1.99. i have also just signed up to tesco.ie and exactly the same prices

roosterman71

Tipp Man wrote: »

Read the Indo link in the above attachment, or just go to your nearest supermarket at lunch, it is in the 1.15-1.20 per litre price range

I was in Dunnes last night. It cost €1.49 for 2 litres of milk (Dunnes milk that is)

itsallaboutheL

roosterman71 wrote: »

I was in Dunnes last night. It cost €1.49 for 2 litres of milk (Dunnes milk that is)

It's Not Irish milk, poor bastards are getting screwed slightly more than the irish farmers

roosterman71

itsallaboutheL wrote: »

It's Not Irish milk, poor bastards are getting screwed slightly more than the irish farmers

Really? I'm gonna check the carton when I get home. Won't buy it anymore if its not irish

The_Conductor

roosterman71 wrote: »

Really? I'm gonna check the carton when I get home. Won't buy it anymore if its not irish

I think its NI milk (which is Irish in my eyes......)

itsallaboutheL

roosterman71 wrote: »

Really? I'm gonna check the carton when I get home. Won't buy it anymore if its not irish

It's gonna say packaged in Donegal.....

Min

It was said that the supermarkets are bringing in milk from elsewhere and selling it cheaper, so your branded milk sells less and then when the branded milk is basically wiped out the supermarket can then raise the price of the cheaper milk and have a bigger margin on the milk it sells.

DagneyTaggart

Good afternoon all. Spent the morning scanning intermittantly through this thread. Interesting reading throughout.

However, some keys points are missing. Namely:

1) How Farming Came to be the most Protected and Subsidised Industry
2) The Forms and Effects of Protectionism
3) The Real Effect of Living in an Agricultural Free Market
4) The Real World

How Agriculture Came to be the most Protected and Subsidised Industry

It should first be noted that Agriculture is the most protected industry in nearly every developed country in the world today, bar a few which we'll get to later. So the issue is less with specific nations or nationalities and more to do with the structure of the industry and how it's connected to wider society. Or to put it another way it's "the nature of the beast."

Caveat: Protectism for Agriculture globally began in the 1930's - it only really came to light in Europe after 57 as has been pointed out with the Treaty of Rome but it was there before.

The problem with Agriculture: Fundamentally, it's the market that's the problem. Farmers have a good year and sells many goods. So they naturally use their profits and invest in selling more the following year. This is done industry-wide. This leads to excess supply that same following year. This is because the population remains largely the same and in a developed country people are not on the bread-line, mostly. So we are left in a situation where more is produced but much the same is eaten. So price goes down which benefits urban communities but really impacts on rural communites. Leading to poor mental health problems and everything else that goes with it. Remembering that back in the day more people lived in the countryside and so more votes living there too politicians responded to this genuine afflixtion by doing their job and relieving some of this hardship. However, the fundamental problem, which now not immediately evident is still lurking around. An example of this is the dairy industry at this very minute. 20 cent a litre is a pittance. The larger scale farmers will be able to cope and those who can innovate however this only immunises themselves for a number of years.

In sum, farmers are running on what's known as a "technological treadmill", which requires them to run faster and faster but they don't move forward.


The Forms and Effects of Protectionism.

There are three main form of protectionism in the Agricultural industry. One, subsidies. Two, tariffs. Three, direct payments. Subsidies has been mentioned in many a post. The main form of subsidy is a price subsidy. This was tried in the past in but instead of helping ended up hurting many stakeholders and was a huge waste of resources. This has lead to direct payments being the most politically friendly form of protectionism. We see it today as the Single Farm Payment. However, the other main form of protectionism is a tariff. We impose tariffs on imports into the EU. Reduction of these would reduce food prices. This is the only point that gets agreement from bodies like the IFA and informed consumers - to my knoweldge. On top of this three forms there are also health and safety tests which food importers have to pass to sell food in the EU. The Journal reported last year that 300 Brasilian farms complied with this last year. So at least some of their beef is equally as safe as ours. This is the reality. You can ignore it; but you can not ignore the consequences of it.

The Real Effect of Living in an Agricultural Free Market

As noted earlier some of the Irish Farming industry are already living in this world. Potato farmers, tillage farmers and pig farmers to name three. Their small numbers perhaps accounting for their lack of politically clout. Their numbers are low and they too face into economical ephitaph but most overcome it, but some unfortunately don't. They manage to over come it through innovation and invention. The mother of all invention is...necessity.

There exists a clearer example though: New Zealand.

In the late 1970's New Zealand farmers were protected like everyone else. Like every other Government they ran into budgeting problems due to this. However, they decided on taking the path less travelled unlike everyone else: they liberalised their farming industry in the space of a few short years. Despite, doomsday predictions from the lobby groups New Zealand is now agmost the most competitive dairy and sleep farmers in the world - with no protection. They managed to do this with only 15% of farmers leaving the industry and the enviroment imroved as well: they cut down on fertaliser use yet increased yields too. This is what is possible for us. However, this will not happen immdieatly.

The Real World

This is not news: it happens 30 years ago. However, politically it is not feasible for the EU to move so radically. Voters and lobby groiups have to be appeased; likewise in America. The Farm Bill in America is published every four years or thereabout. $50-odd billion when to famers in last years Bill. It was widely criticised in the media; Bush said he'd veto it; but it passed by a strong margin. The reason being was that there was another $300bn added into the farm bill to sweeten up / bribe senators. Because it passed by a 2/3rds majority Bush lost his power to veto it and so it passed. Life politically is not simple.

So the best we can hope for is a continuation of the withdrawal of protectionism along with safety nets for the rural community that are more economically justified.

Rant over.

edanto

Welcome to boards. A fine first post.

Great idea to mention New Zealand... personally, I've worked briefly on a cattle station in Australia and heard what they had to say about farming with no subsidies. It's tough, like farming always is, but the farmer feels better about it. Who wants to take charitable payments from their neighbours just to work in the industry they love? Farming with no subsidies is more wholesome.


I would rather see the money that is currently spent on subsidies instead being spent on developing rural communities, growing cottage industries, helping existing cottage industries to scale up to export, more or less what the county enterprise boards are doing, just more of it.

roosterman71

itsallaboutheL wrote: »

It's gonna say packaged in Donegal.....

It doesn't even say that. just says its full of goodness from the "pastures of Ireland". The only other info is Dunnes address in Bangor and Dublin. No mention if its Irish milk or not

irish_bob

DagneyTaggart wrote: »

Good afternoon all. Spent the morning scanning intermittantly through this thread. Interesting reading throughout.

However, some keys points are missing. Namely:

1) How Farming Came to be the most Protected and Subsidised Industry
2) The Forms and Effects of Protectionism
3) The Real Effect of Living in an Agricultural Free Market
4) The Real World

How Agriculture Came to be the most Protected and Subsidised Industry

It should first be noted that Agriculture is the most protected industry in nearly every developed country in the world today, bar a few which we'll get to later. So the issue is less with specific nations or nationalities and more to do with the structure of the industry and how it's connected to wider society. Or to put it another way it's "the nature of the beast."

Caveat: Protectism for Agriculture globally began in the 1930's - it only really came to light in Europe after 57 as has been pointed out with the Treaty of Rome but it was there before.

The problem with Agriculture: Fundamentally, it's the market that's the problem. Farmers have a good year and sells many goods. So they naturally use their profits and invest in selling more the following year. This is done industry-wide. This leads to excess supply that same following year. This is because the population remains largely the same and in a developed country people are not on the bread-line, mostly. So we are left in a situation where more is produced but much the same is eaten. So price goes down which benefits urban communities but really impacts on rural communites. Leading to poor mental health problems and everything else that goes with it. Remembering that back in the day more people lived in the countryside and so more votes living there too politicians responded to this genuine afflixtion by doing their job and relieving some of this hardship. However, the fundamental problem, which now not immediately evident is still lurking around. An example of this is the dairy industry at this very minute. 20 cent a litre is a pittance. The larger scale farmers will be able to cope and those who can innovate however this only immunises themselves for a number of years.

In sum, farmers are running on what's known as a "technological treadmill", which requires them to run faster and faster but they don't move forward.


The Forms and Effects of Protectionism.

There are three main form of protectionism in the Agricultural industry. One, subsidies. Two, tariffs. Three, direct payments. Subsidies has been mentioned in many a post. The main form of subsidy is a price subsidy. This was tried in the past in but instead of helping ended up hurting many stakeholders and was a huge waste of resources. This has lead to direct payments being the most politically friendly form of protectionism. We see it today as the Single Farm Payment. However, the other main form of protectionism is a tariff. We impose tariffs on imports into the EU. Reduction of these would reduce food prices. This is the only point that gets agreement from bodies like the IFA and informed consumers - to my knoweldge. On top of this three forms there are also health and safety tests which food importers have to pass to sell food in the EU. The Journal reported last year that 300 Brasilian farms complied with this last year. So at least some of their beef is equally as safe as ours. This is the reality. You can ignore it; but you can not ignore the consequences of it.

The Real Effect of Living in an Agricultural Free Market

As noted earlier some of the Irish Farming industry are already living in this world. Potato farmers, tillage farmers and pig farmers to name three. Their small numbers perhaps accounting for their lack of politically clout. Their numbers are low and they too face into economical ephitaph but most overcome it, but some unfortunately don't. They manage to over come it through innovation and invention. The mother of all invention is...necessity.

There exists a clearer example though: New Zealand.

In the late 1970's New Zealand farmers were protected like everyone else. Like every other Government they ran into budgeting problems due to this. However, they decided on taking the path less travelled unlike everyone else: they liberalised their farming industry in the space of a few short years. Despite, doomsday predictions from the lobby groups New Zealand is now agmost the most competitive dairy and sleep farmers in the world - with no protection. They managed to do this with only 15% of farmers leaving the industry and the enviroment imroved as well: they cut down on fertaliser use yet increased yields too. This is what is possible for us. However, this will not happen immdieatly.

The Real World

This is not news: it happens 30 years ago. However, politically it is not feasible for the EU to move so radically. Voters and lobby groiups have to be appeased; likewise in America. The Farm Bill in America is published every four years or thereabout. $50-odd billion when to famers in last years Bill. It was widely criticised in the media; Bush said he'd veto it; but it passed by a strong margin. The reason being was that there was another $300bn added into the farm bill to sweeten up / bribe senators. Because it passed by a 2/3rds majority Bush lost his power to veto it and so it passed. Life politically is not simple.

So the best we can hope for is a continuation of the withdrawal of protectionism along with safety nets for the rural community that are more economically justified.

Rant over.

an excellent post but i would point to the fact that new zealand has many advantages over ireland , better climate , drier land plus its much easier to put a large farm together in new zealand than in ireland , farms in ireland are very fragmented , even those with several hundred acres would not have it all in the one block , being a new country ( NZ) you dont get windy roads carving huge chunks of land in half like you do here

ChocolateSauce

Industrial farming is a viable business, what we have in Europe right now is not. The CAP should be phased out over the next 20 years, and if a farmer can't make it, that's too bad. Governments in Europe aren't allowed to prop up failing businesses, farming should be no different.

Min

People need food, Europe had its shortage of food in the past, it doesn't want to go there again and have to depend on imports that might not be there. This is why agriculture is protected, people need air to breathe, clean water to drink, food and shelter, the basics for life, it is not like other businesses.
Everyone needs food and the world's population continues to grow, we saw the food riots of 2007 and how something as simple as using food for fuel led to price increases and death.
The food supply in this world is finely balanced.