Oireachtas Joint and Select Committees

Tuesday, 21 April 2015

Joint Oireachtas Committee on Agriculture, Food and the Marine

Horticulture Sector: Irish Farmers Association

2:00 pm

Photo of Tom BarryTom Barry (Cork East, Fine Gael) | Oireachtas source

I welcome the witnesses. The problem, as alluded to by previous speakers, is that the multiples have secured a dominant position in the market as a result of the shopping behaviour of Irish people. I do not know how the growing phenomenon of online sales will be dealt with but it, too, must be addressed. Are potato sales, which stood at €150 million at one point, still in decline as a result of changes in eating habits such as the consumption of more pasta?

One could argue that below-cost selling is taking place in the tillage industry. I calculated my production costs a moment ago. The only difference that arises is that we can sell to numerous suppliers at the world price, rather than at a price that is being manipulated internally. In 2009, the dairy sector could also have argued that it was selling its produce below cost. Incidentally, the term "below-cost selling" must be defined if the legislative change they seek is to be introduced. Responsibility for one of the main costs facing farmers, namely, the cost of conacre or leasing, lies with farmers and there is no way anyone would legislate in that area.

Tillage land is currently making €300 per acre, while potato land may make less. I do not know how to get around the challenge these profits present. As a tillage farmer, my sector is facing competition from people who are willing to rent land for ten years for grass. Some people can make a profit growing grain or vegetables on their own land but not everybody is on their own land. Should we introduce a definition that includes the percentage of land that is owned and the percentage that is rented in order that farmers will be able to work through their costs, as is done in the Teagasc bulletin every year, and decide what is a fair set of costings? One cannot speak generally about below-cost selling because the costs of production vary from farmer to farmer. For this reason, we need to agree a definition of costs. We heard that the greatest threat is the failure of the Government to address the issue of below cost selling but we must first define the problem before we can deal with it. I do not mean that statement as a criticism of the witnesses.

As other speakers noted, the joint committee had substantial discussions on below-cost selling a few years ago. It would have been good to have representatives of the growers before us at that time but they failed to appear because they were afraid. I was informed privately that they feared they would be de-listed or treated unfairly by the multiples. It is time to spit everything out and inform members which companies are behaving poorly and which are not. We cannot pursue this issue with one hand tied behind our backs. We need to know which companies are misbehaving and which are not.

At one point during the joint committee's hearings, I asked a representative of one of the multiples if he had ever heard of the terms "pot-holing" and "marketing support". The response was to blank the question. These terms were used by a producer located not far from this building who had been drive to his wits' end by the behaviour of some of the multiples. We need to have this information on the record because it is frustrating that the issue is clouded in fog. I have the impression that the reason we are here again is that the multiples have decided they can continue to behave as they wish. It is time to name and shame.

We heard that Irish supermarkets are quick to wave the Irish flag. That is also true of many other businesses which import foreign grain and other products. I spent at least ten minutes last week looking at a carton of milk, which had many Irish features on the label but had been produced in Northern Ireland. We all wish to have better co-operation between North and South but it should not take a person who is familiar with these matters, as I am, ten minutes to figure out the origin of a carton of milk. I found out only by reading a small stamp.

Farmers have a free choice. I dropped a large amount of conacre this year because I could not make money on it. I normally forward sell when I rent land. I know my costs of production, which are straightforward, and the cost of land. For this reason, I sell on or near the day I set and if I cannot make money on that day, I do not plough. It is as simple as that.

I know that a person cannot stop fully but there is scope to pull back to a certain degree. Were it not for the single farm payment, it would be impossible to make such decisions. Forward selling is one option upon which progress could be made. If we are to revisit this issue and speak to the multiples again, we must ensure that discussions on their behaviour are open and frank because I believe their behaviour is wrong. I spoke to many of them during the Christmas period when they were ruining the market at a time of year when farmers absolutely had to sell their produce. I am also aware of their behaviour when it comes to spoilage. We need facts and we need some brave person to stand up and say: "This is what is happening. Here is the documentation. I am not happy about it." I know it is a difficult thing to ask but we need to get this onto the agenda. Otherwise, we will be discussing this again in two years' time. A lot of other farmers will not be caught out. Unfortunately it is those farmers who are trying to make a living from this industry who will suffer.

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