ESRI and Competition Authority responsible for banking regulation..

ei.sdraob

namenotavailabl wrote: »

It's a delicate balance between price controls and maintaining a viable industry.

sigh

price controls will hurt the consumer and the farmers themselves, see below

lets assume that tomorrow the government brings out the Minimum Milk Act of 2010 and farmers have to be paid 60c a liter (double the previous 30c they got as per frontline numbers) minimum the farmers rejoice thinking they will be now twice better off (not for long, see below)

what happens then?

any or combination of these events below hurting both the consumer and the farmer themselves:

1. some supermarkets/shops put up the price of milk by 30c a liter, passing on the rise to consumer > hurting the consumer
|-> lets say average family of 4 drinks 2 liters a day, thats 730 liters a year, thats 730 * 0.30 = €219 added to the family shopping list, of course all other milk products based on milk such as cheese & butter will also go up adding more to the bill, this family now either pays up for the privilege of being shafted (unlikely in a recession with budgets already being strained) or they cut down on their dairy shopping, which of course will eventually hurt the farmers as demand for their product goes down


2. other supermarkets/shops find that such a rise makes it unprofitable (obviously enough retailers wont sell a product(s) at loss especially one that takes up so much retail space) to sell some or all dairy products and they cant pass on or absorb the rise, so they simply opt not to sell the product > hurting the farmers & hurting the consumer


3. and finally some other supermarkets/shops start importing milk from UK or North Ireland > hurting the farmers here once again
|->we cant prevent above from happening since we are in EU, so of course we can drop out of EU and put up trade barriers > and of course that will also hurt the farmers

---

so as you can see the farmers can either do something about their situation by coming together as per my co-op suggestion and actually bettering themselves by being enterprising

or they can try to destroy their own lively-hoods by imposing price controls as per above examples

i used milk in the example but you can rinse and repeat for other products

/

ei.sdraob

@taconnol

see my post above

there really is only one option for the farmers

whether they choose to take it or not is their choice, if they dont they are damned anyways whether you like it or not

i understand that you and others dont think its "fair" etc, but thats life and business, people/organisations can either choose to moan about it or to do something about

Macha

ei.sdraob wrote: »

@taconnol

see my post above

there really is only one option for the farmers

whether they choose to take it or not is their choice, if they dont they are damned anyways whether you like it or not

i understand that you and others dont think its "fair" etc, but thats life and business, people/organisations can either choose to moan about it or to do something about

No, the other option is for the industry to be better regulated. The options that exist are not just the ones that you propose. Again, you've chosen not to address individual points and just blindly repeat your earlier posts, ignoring any protests that your suggestions would not work.

As for saying that it's just "life" - what utter, utter nonsense. The market is there to serve us - not the other way around.

namenotavailablE

Some suprmarkets/shops put up the price of milk by 30c a liter, passing on the rise to consumer > hurting the consumer

I accept that it's undesirable to impose minimum prices but given an imperfect market where large multiples can require suppliers to sell at less than cost is simply unsustainable, so long as (and this is important) those suppliers have an efficient business model - there is no justification for paying for inefficiency. It is essential to aim to be as efficient/ productive as possible in all aspects of your business- operations/ marketing/ selling.

If the milk price ought to be 60 c per litre in circumstances where efficient enterprises cannot produce it for less than that then that is the true cost. Of course, imposing a minimum price above the current retail price will hurt consumers in the immediate term. However, the imposition of below cost pricing on indigeneous producers will lead to a situation where no such producers will remain in the market- they will either liquidate their businesses or divert their efforts to another activity. This will mean that the replacement agri-products will need to be sourced elsewhere, which in turn will impose additional costs (logistics/ storage/ packing), inevitably leading to price increases. Ultimately, the consumer pays.

Ultimately, we will have to pay the true economic cost.

ei.sdraob

taconnol wrote: »

No, the other option is for the industry to be better regulated. The options that exist are not just the ones that you propose. Again, you've chosen not to address individual points and just blindly repeat your earlier posts, ignoring any protests that your suggestions would not work.

As for saying that it's just "life" - what utter, utter nonsense. The market is there to serve us - not the other way around.

fine the industry gets "regulated" and the farmers make more money as they want



what happens then?

* does the regulator hold a gun up to the retailers heads and prevent the retailers passing on the cost to consumers as per scenario 1) in post#92

* what if the retailer refuses to sell the product? do you force them to sell it at a loss?? as per scenario 2) in post #92

* how do you stop retailers from sourcing the product in UK or elsewhere? as per scenario 3) in post #92

ei.sdraob

namenotavailabl wrote: »

I accept that it's undesirable to impose minimum prices but given an imperfect market where large multiples can require suppliers to sell at less than cost is simply unsustainable

no one is forcing the farmers to sell at below cost price, if they dont want to sell at the price the supermarkets want they can either sell to customers themselves (as per my idea) or close business

what happens when a business is running at a loss?

* you try to cut your costs
* if you cant do that you go bankrupt and close shop


what we also have to bailout the farmers (who are already getting half of the EU budget money and other subsidies) now too? this is getting ridiculous now

sure while we at it why not bailout every business in this country thats running at a loss now, there must be a money tree growing somewhere on the grounds of the Revenue

ei.sdraob

@taconnol

how exactly would "regulation" prevent the consumers and the farmers from suffering?


as has been shown in this post

Macha

ei.sdraob wrote: »

no one is forcing the farmers to sell at below cost price, if they dont want to sell at the price the supermarkets want they can either sell to customers themselves (as per my idea) or close business

Why do you continue to believe this fallacy? Supermarkets control 80% of food distribution and as a result are the major buyer of farmed produce. They force farmers to supply them with produce at below cost. So it is entirely true that farmers are being forced to sell at below cost price.

But yes many farms are closing as people cannot see the point in slaving away for an average farm income that is below minimum wage.

ei.sdraob wrote: »

what happens when a business is running at a loss?

* you try to cut your costs
* if you cant do that you go bankrupt and close shop

* it's clear you know very little about farming and the required inputs if you think that farmers can continue to cut costs.
* you continually ignore the severe repercussions that the collapse of Ireland's agriculture sector would have.

ei.sdraob wrote: »

what we also have to bailout the farmers (who are already getting half of the EU budget money and other subsidies) now too? this is getting ridiculous now

This is getting ridiculous. Are you even bothering to read anything anyone else has said? I'll post it again:

In 2009, Direct Payments of €1.87 billion were greater than National Farm Income €1.65 billion, as the majority of farm enterprises in 2009 were operating at below the costs of production

Do you genuinely begrudge farmers the subsidies that bring them an average farm income of under minimum wage while at the same time expect to walk into a supermarket and buy your food for ridiculously low prices that do not cover the costs of production? You want to talk about fundamental lessons in economics. Lesson #1: There is no such thing as a free lunch.

ei.sdraob wrote: »

sure while we at it why not bailout every business in this country thats running at a loss now, there must be a money tree growing somewhere on the grounds of the Revenue

Stop the irrelevant, tiresome, populist whining about bailouts and try to learn something about what's actually happening in Irish agriculture today.

Macha

ei.sdraob wrote: »

* does the regulator hold a gun up to the retailers heads and prevent the retailers passing on the cost to consumers as per scenario 1) in post#92

What exactly is your problem with consumer paying a price that covers the cost of production?

ei.sdraob wrote: »

* what if the retailer refuses to sell the product? do you force them to sell it at a loss?? as per scenario 2) in post #92

This is related to the next question.

ei.sdraob wrote: »

* how do you stop retailers from sourcing the product in UK or elsewhere? as per scenario 3) in post #92

This is already an issue for Irish agriculture. Why is it not explained to the public that they pay far more for their food than they do at the supermarket till?

ressem

Seriously most of the ordinary joe soaps don't give a sh** about quality, they want cheap food.
Check out any of the food programs dealing with this in UK.

There are butcher/small farmer groups that improve their income supplying meat and veg, delivering to the customers home by refrigerated van, at not much higher price than the supermarket shelves. For large orders at Christmas/Easter they can be cheaper (assuming you are courteous enough to inform them whether you want lamb, ham or turkey a few weeks in advance).
It's profitable where the customers' requirements are reasonably consistent and predictable, and through word of mouth grouped in small areas.

If the IFA would care to do some specific promotion work (informing both the general public and farmers) for them, they might put together the framework of a small co-op. There's plenty of would-be customers that, following a change of address, don't have the local contacts to provide them with food recommendations, and walk into the supermarket to avoid hassle of looking.

It's not something where your need to cover all food-groups immediately and cut all ties with the supermarket.
Best way to annoy Dunnes is to have the shopper walking in their door knowing that the meat and veg has already been purchased by standing order.

The_Honeybadger

ressem wrote: »

There are butcher/small farmer groups that improve their income supplying meat and veg, delivering to the customers home by refrigerated van, at not much higher price than the supermarket shelves. For large orders at Christmas/Easter they can be cheaper (assuming you are courteous enough to inform them whether you want lamb, ham or turkey a few weeks in advance).
It's profitable where the customers' requirements are reasonably consistent and predictable, and through word of mouth grouped in small areas.

If the IFA would care to do some specific promotion work (informing both the general public and farmers) for them, they might put together the framework of a small co-op. There's plenty of would-be customers that, following a change of address, don't have the local contacts to provide them with food recommendations, and walk into the supermarket to avoid hassle of looking.

It's not something where your need to cover all food-groups immediately and cut all ties with the supermarket.
Best way to annoy Dunnes is to have the shopper walking in their door knowing that the meat and veg has already been purchased by standing order.

I see alot of sense in this for the small farmer, however when you get to the big guys rearing 500+ cattle, or the guy producing 200k gallons of milk (these are the farms el.sdraob wants) a problem arises, it is simply too much product coming to a small market. The idea is great no doubt about it, but it is not a national solution as so much of our produce is exported.

ei.sdraob

taconnol wrote: »

What exactly is your problem with consumer paying a price that covers the cost of production?

see http://boards.ie/vbulletin/showpost.php?p=64294410&postcount=92

forcing and increase in the prices would cause the consumers to pay more and then this will also hurt the farmers in any number of ways as illustrated in my post, you have not addressed that post yet as you know thats exactly what will happen thanks to "regulation" and price fixing


if the farmers want to sell produce which they claim is high quality then theres nothing stopping them setting up a co-op with shops as per my idea in this thread and selling products based on quality (example of kerrygold butter in Germany) on making agreements with small shops as per the butcher here in Galway example i made earlier

taconnol wrote: »

This is already an issue for Irish agriculture. Why is it not explained to the public that they pay far more for their food than they do at the supermarket till?

it is not the jobs of supermarkets to "educate" consumers

they sell what consumers want and what they are willing to pay, once again the farmers can either do something about it or roll over

ei.sdraob

taconnol wrote: »

Why do you continue to believe this fallacy? Supermarkets control 80% of food distribution and as a result are the major buyer of farmed produce. They force farmers to supply them with produce at below cost. So it is entirely true that farmers are being forced to sell at below cost price.
.

once again if they want to create and artificial market with "regulated" and fixed prices you will endup in a situation that will only hurt the farmers as per this post


* a) the farmers can either do something about this problem by setting up their own distribution chains
or
* b) they can try to get the government to interfere in the market (As they are trying to do)

a) will make them money and has been done before in this country
b) will hurt the consumers and then the farmers themselves

taconnol wrote: »

But yes many farms are closing as people cannot see the point in slaving away for an average farm income that is below minimum wage.
.

thats life you either adapt or you are left behind, protectionism and racketeering will only hurt the farmers in the longer term

taconnol wrote: »

* it's clear you know very little about farming and the required inputs if you think that farmers can continue to cut costs.

once again i outlined multiple solutions that farmers can take (and some have taken
you on the other hand have not provided a single constructive idea in this thread

taconnol wrote: »

* you continually ignore the severe repercussions that the collapse of Ireland's agriculture sector would have.
.

you continually ignore the severe repercussions that the taxpayers and the consumers would have to endure in order to prop up the farmers, who are already getting all sorts of subsidies

taconnol wrote: »

Do you genuinely begrudge farmers the subsidies that bring them an average farm income of under minimum wage while at the same time expect to walk into a supermarket and buy your food for ridiculously low prices that do not cover the costs of production?
.

i dont begrudge the farmers, like any other business people they either adapt or die, i outlined idea how they can adapt and make better lives for themselves, you outline an idea that will endup killing the same farmers businesses anyways

taconnol wrote: »

You want to talk about fundamental lessons in economics. Lesson #1: There is no such thing as a free lunch.

what the farmers want is exactly that, a free lunch at the expense of other farmers and the consumers

so as per your own words "theres no free lunch"

taconnol wrote: »

Stop the irrelevant, tiresome, populist whining about bailouts and try to learn something about what's actually happening in Irish agriculture today.

thats exactly how they are acting, they want a bailout of their way of life, they want someone else to pay for their mistakes (sounds familiar eh?), well the problem is that only ends-up hurting themselves in the long term

jmayo

ei.sdraob wrote: »

we already subsidize the farmers thru EU and all sorts of other welfare schemes

now they are taking the piss altogether

price controls will hurt consumers and the farmers themselves eventually, im sorry that you can not see that

.

You subsidise more than farmers or have ever wondered where all those IDA grants given to FDI companies come from ?
Some of these same companies would shag off at end of their cosey grant period to another cheaper location.

You subsidised the landlords and investors of this country for the best part of 10 years.
These same landlords and investors/speculators have produced no exports but added to the imports of this country.

ei.sdraob wrote: »

thats exactly how they are acting, they want a bailout of their way of life, they want someone else to pay for their mistakes (sounds familiar eh?), well the problem is that only ends-up hurting themselves in the long term

I think you have just highlighted your view on farmers right there. :rolleyes:
Yous see it as their fault.

You try and lump farmers in with bankers, but there is big difference.
Most if not all full time farmers became less wasteful and more productive and they are not in trouble because they ran their businesses poorly unlike the banks.

You claim they want someone else to pay for their mistakes.
Most of them haven't made mistakes.
They became ultra productive, they increased productivty, they improved cropping and breeds, etc.
There was a drive for this in UK post WWII and in Ireland post EU entry.

Then the EU comes along and tells them to halt production, because they have actually created false market and we shouldn't produce so much.

Then the middlemen and retailers take bigger percentage of the end user price and leave the farmer/producer with smaller chunk.
All the while their costs are spiralling (equipment, labour, oil and fertiliser).
So how is that their mistake ?

Oh wait they should have created an alternative supply chain themselves. :rolleyes:

ei.sdraob

@jmayo im not going arguing with you since your avoiding answering the point on how "this will not end-up hurting the consumer and then the farmers themselves"

ive no problems with farmers, i even made an example of a local butcher who manages to sell quality local produce for cheaper than the supermarket next door, if only more people in this country were this enterprising and spend less time moaning and expecting the government to wipe their rear for them at someone else's expense


i have clearly shown that protectionism and price-fixing will only result in the farmers themselves being hurt (and of course the consumers) here

if the government are stupid enough (ha!) to let farmers get away with fixing prices and "regulation", then dont comeback here some time later and moan that the farmers were destroyed (by their own greed)

i have outlined how farmers can turn this situation to their advantage but all i heard are excuses despite past successes in similar co-ops

as usual in this country its easier to blame someone else (the govt, the consumer) than do something about the problem yourselves

.

Tipp Man

Sleepy wrote: »

Because the cost of importing should be more than enough to balance out any price difference in the common market.

If it's a matter of health and safety, we could insist that any produce being sold in Ireland is produced to accordance with those levels of health and safety.

If we still can't compete with imports after that level why bother continuting to compete directly? Either differentiate or move up the production chain.

Hold on now

1) We have some of the most expensive energy in the world, you be amazed how much electricity it takes to milk cows 300 days a year

2) we have some of the highest wages in the world, meaning that for every employee Glanbia and Kerry have you could have probably have 1.5-2 in New Zealand. Also minimum wage is way too high, no way could a farmer afford to employ an extra person if he was to increase in cows, compare this with USA where the Mexicans are working for a couple of dollars an hour

3) regulation, our food cost more to produce because Irish (and EU) farmers have to abide by more rules than anywhere else in the world. Things like the nitrates directive mean that Irish farmers can only have a certain number of cows to the acre (about 1) not matter how productive the land is. It also means they have to build rather expensive sheds and slurry storage to comply with these rules, these sheds have to be paid for

In many ways Irish farming problems are typical of the Irish economic problems, i.e high wages, high energy costs, high regulation. all of these items make Ireland un competitive, not just in farming but in any kind of production and that is why this country is up the creek

Tipp Man

ei.sdraob wrote: »

@jmayo im not going arguing with you since your avoiding answering the point on how "this will not end-up hurting the consumer and then the farmers themselves"

ive no problems with farmers, i even made an example of a local butcher who manages to sell quality local produce for cheaper than the supermarket next door, if only more people in this country were this enterprising and spend less time moaning and expecting the government to wipe their rear for them at someone else's expense


i have clearly shown that protectionism and price-fixing will only result in the farmers themselves being hurt (and of course the consumers) here

if the government are stupid enough (ha!) to let farmers get away with fixing prices and "regulation", then dont comeback here some time later and moan that the farmers were destroyed (by their own greed)

i have outlined how farmers can turn this situation to their advantage but all i heard are excuses despite past successes in similar co-ops

as usual in this country its easier to blame someone else (the govt, the consumer) than do something about the problem yourselves

.

ei.sdraob I nearly always enjoy your posts, they are usually very factual and you generally sing from the same hym sheet as myself.

But just with regards to farmers setting up their own coops etc, it is not quite as simple as you make it sound (or indeed as it should be)

A little back ground, each dairy farmer in the country has a quota to supply X amount of milk to Glanbia, Kerry whoever. Now we supply 500k litres of milk to Glanbia who pay say 20c a litre. Suddenly Kerry are offering 30c a litre but Glanbia are sticking with 20c. Now in a normal market I would send my 500k litres to Kerry and make a nice profit for myself, my costs are the same so i'm quids in.

However there are at least 2 major stumbling blocks, firstly my quota is with Glanbia, so I am legally obliged to sell to them, I cannot send as much as 1 litre to Kerry. The option to move your quota between Coops (or should i say PLC's) is practically non existent and only occurs very rarely and afaik you need department of agriculture approval to do so. Secondly the nearest Kerry farmer is about 100 miles from me so even if i was allowed to send milk to Kerry they would not send a lorry 100 miles to collect my milk. If you look at a map of the country then the Coops all have their own little area and they never overlap or cut into each others areas. Its a closed shop

Now with regards to setting up my own coop there are also a couple of issues

As above moving my quota is extremely difficult, so even if i set up a Coop I can't supply it as my quota is stuck with Glanbia (subject to Department of Agri). Then I say sod Glanbia, stick that quota I'm just going to sell all my milk to my Coop with no quota, this is completely illegal and would be closed down before it started.

There is also the financial side of things to look at, if farmers are to set up this coop where are they going to get the money from?? The costs of setting up processing plants are huge (dominated by regulations of course), Most farmers are already in serious debt (due to regulation) and the banks just aren't lending. So I bring in a venture capitalist 50-50. Now he wants to make money so instead of selling the milk for 80c where I was making money he wants to sell it at 90c so he get a return on his investment, next thing you know he wants to realise his investment, Coop has done well, he wants to float on stock exchange, I loose control, back to where we are now

Also in no way whats so ever would Tesco's allow this Coop to get too big so as to influence the price that the Coop would charge Tesco for the milk, at the first sign of threat they would come down on it like a ton of bricks as they have already done on some supplier both in Ireland and the UK forcing them to the wall

Make no mistake about it Tesco are calling all the shots in agriculture here in Ireland, I normally an open market man but these guys are just too powerful (next post will be about the consequences of this)

ei.sdraob

Tipp Man wrote: »

Make no mistake about it Tesco are calling all the shots in agriculture here in Ireland, I normally an open market man but these guys are just too powerful (next post will be about the consequences of this)

thanks for the example, maybe your right maybe it might fail and is "daft" idea
i just hope they at least try either get together in co-op(s) or/and create more direct sales as per the butcher example before
but i just dont see how this whole thing if allowed to happen will not backfire on the farmers themselves, never mind the customers
the supermarkets surely as hell wont be the ones loosing out

i usually go for quality myself and check labels and that seems to have been the general attitude on frontline the other night, so there surely is alot of support for the farmers and people do want quality local products

as for Tesco being a monopoly thats for a matter of EU monopoly courts to decide, the farmers should make a case to the these authorities who do have a good record if dealing with monopolies or companies using anti-competitive practices in past like Microsoft and Intel

.

jmayo

ei.sdraob wrote: »

@jmayo im not going arguing with you since your avoiding answering the point on how "this will not end-up hurting the consumer and then the farmers themselves"

ive no problems with farmers, i even made an example of a local butcher who manages to sell quality local produce for cheaper than the supermarket next door, if only more people in this country were this enterprising and spend less time moaning and expecting the government to wipe their rear for them at someone else's expense


i have clearly shown that protectionism and price-fixing will only result in the farmers themselves being hurt (and of course the consumers) here

if the government are stupid enough (ha!) to let farmers get away with fixing prices and "regulation", then dont comeback here some time later and moan that the farmers were destroyed (by their own greed)

i have outlined how farmers can turn this situation to their advantage but all i heard are excuses despite past successes in similar co-ops

as usual in this country its easier to blame someone else (the govt, the consumer) than do something about the problem yourselves

.

Best answer to your post is form Tipman.
He is giving exampleof how exactly Irish Coops (creameries in particular) operate and as he said most are now PLCs so they no longer the benevolent farmers entity.

Your point about local butcher is an idea, I even mentioned in one of my posts (not sure if you noticed ?) about trend in US of clubbing together to buy beef carcases direct from farm.
The big issue with that here is getting around the myriad of regulations about slaughtering and butchering.

Remember how Foot and Mouth spread in UK very fast across the country last time.
This was partially true to all the new regulations that resulted in the small local abattoirs had been shut down, thus cattle or other animals are dragged across the country to the few abattoirs remaining.

ei.sdraob wrote: »

thanks for the example, maybe your right maybe it might fail and is "daft" idea
i just hope they at least try either get together in co-op(s) or/and create more direct sales as per the butcher example before
but i just dont see how this whole thing if allowed to happen will not backfire on the farmers themselves, never mind the customers
the supermarkets surely as hell wont be the ones loosing out

i usually go for quality myself and check labels and that seems to have been the general attitude on frontline the other night, so there surely is alot of support for the farmers and people do want quality local products

as for Tesco being a monopoly thats for a matter of EU monopoly courts to decide, the farmers should make a case to the these authorities who do have a good record if dealing with monopolies or companies using anti-competitive practices in past like Microsoft and Intel

.

Tesco were chased out of Ireland before AFAIK.
I know it will sound like the patriot lenihan speech, but I think we are going to have to start supporting our own producers.
Now that does not mean I shop in Tesco Dundalk rather than Tesco Newry or shop in Dunnes Drogheda rather than Dunnes Newry.
I am talking about being patriotic in buying Irish produced goods, not goods sold in Irish shops.
It does mean I don't buy onions from NZ (Dunnes Stores) or apples from South Africa.

These items can be grown here and to spread it wider, in the EU.
Thus I now buy EU rather than outside EU.
Then if option I buy Irish produce.

Oh and on last point the pork producers here were pulling fast one where they were importing bacon from Denmark and repackaging/relabelling as Irish.
Again the middleman screwing people. :mad:

You mention you go for quality, but a lot of buyers just go for price (even more so now) which often means imported poor quality with little of the monitoring that our own EU produced food has to go through.

ei.sdraob

jmayo wrote: »

You mention you go for quality, but a lot of buyers just go for price (even more so now) which often means imported poor quality with little of the monitoring that our own EU produced food has to go through.

I understand and agree, tho I wouldn't blame people who are now on potentially tight budgets for opting for price over quality, its their choice

and im sure there are all sorts of chancers repackaging meat or "mislabeling" products, fixing prices wont make them go away of anything itll make it more lucrative


I mentioned earlier in thread an example of Fairtrade coffee, their business model is very interesting (focusing on quality and exploiting guilt in consumers, but ultimately for a "fair" cause. i hope ) and are now a very well known brand, thats what farmers should focus on, as I said i was shocked on how my friend from Germany spoke so highly of KerryGold butter, thats power of branding and (perceived?) quality

something to think about