Mr. Pat McCormack:

I thank the Chair for the opportunity to put forward our observations on the 69-page proposed Bill. A properly functioning food chain in Ireland, and indeed in Europe, is central to ensuring food security. It is equally central to securing sustainable food production. When we hear of sustainable food production at the minute, there are three legs to the stool but it is very much one leg in focus at the moment and that is the environmental aspect. Without the economic focus we will not have environmental or social sustainability. It is imperative with all the challenges that have arisen. We have heard a lot about food inflation in the past 18 months but in the previous 25 to 30 years there was no food inflation. It was stagnation from a farm gate perspective. In that time, processes and retailers and their concentration of market power in particular from a retailer, has forced down the margin for the primary producer. We are involved with the European Milk Board, EMB, and it is equally a European issue. It is not confined to Ireland. If we want the family farm structure to remain in place, action has to be taken and there needs to be strength in this position. We need to see improved margins for farmers to bring about a properly functioning supply chain and above all, we need transparency. That is critical along the price chain. There will always be price volatility but we need transparency to develop a level of fairness out there.

The office for fairness and transparency in the agrifood supply chain must take the lead, be strong and independently rule practices of unfairness where they see fit. This authority should be co-funded by the EU and mandatory funding from industry such as retailers because it cannot be carried by the primary producer.

The Competition (Amendment) Act 2006 created huge issues as regards below-cost selling. Mr. Cullinan alluded to it from the perspective of the vegetable growers - the stress, the anxiety, the trend among farmers to reduce numbers as a result. The retailers concern is footfall and our produce, whether it is dairy, beef or vegetables, is used to gain those feet in the door. This form of low-cost selling has to be stopped.

There are two clear points in the supply chain and one of those, which is quite transparent, is the farm gate price. Equally as transparent, to be fair, is the sale price on the shelf but we need transparency in between. It is critical for our food chain. Large food processing and retailing companies have comprehensive sustainability policies but when it comes to economics and sustainability for the primary producer, they do not understand the effects of their actions.

I will be brief on this as I would especially like to be involved in questions and answers, but the new office must take the lead, be strong and independent, and prepared to rule. As regards specific comments on the general scheme, the Bill states: "The functions of the Office shall include analysis and reporting of price market data." This data needs to be up to date and to include the costs associated with production and the margin along the supply chain.

Without such data, fairness cannot be established. The ICMSA believes that it is important to clarify that the Bill also will apply to suppliers of farm inputs, a sector dominated by a small number of companies. We have seen the impact of inflation there, whether on fertiliser or oil, in recent months. That has a huge effect on the margin for the farmer. We question the introduction of levies and charges. Such charges cannot be imposed on the primary producer either directly or indirectly. The ICMSA welcomes the general functions of the office outlined in the general scheme but, on a technical point, the function set out in head 8(1)(b) must include making available analysis of information on costs and margins in the supply chain. We must use stronger phrases than "encourage compliance" or "encourage fairness". There must be fairness to ensure farm families have a sustainable income as we move forward. On the collection of data, there needs to be a focus on more than just publicly available data. The office must have the power to obtain market data to ensure that fairness is achieved in the food chain. It is true that some data may be market-sensitive. Such data do not need to be published, but they must be available to the office if we are to achieve fairness.

The ICMSA proposes that the farm organisations that are members of the farming pillar should have representation on the board. My understanding is that currently, membership of the board is limited to six, with three members required for a quorum. Given the importance of the issue of fairness for farmers, we need to see a greater level of representation on the board. The ICMSA feels that the office should publish all decisions relating to prohibitions of UTPs. We do not support the use of the phrase "may publish" in the general scheme. It is critical that all decisions be published. On the disclosure of interests, it is advisable that all past or current interests are disclosed by the members of the board, chief executive and staff to avoid issues later.

Regarding the criteria set out in the general scheme on the basis of which the office may decide not to investigate a complaint, such as a practice occurring "at too remote a time to justify an investigation", we feel that there must be an investigation if a complaint has been made. The office should always inform complainants if their complaint will not be followed through at its earliest convenience. The fines that are enforceable by the office should be realistic and should be determined by the market position of the lawbreaker and the level of offence committed. With regard to independent dispute resolution, it is likely that market power will disincentivise smaller producers for using such a mechanism for fear of future retaliation, and because of the potential costs associated with it. Prices should be published on a monthly basis and in a timely fashion. It is critical that we get this legislation right. Farm families have been waiting a long time for it. There must be a level of sharpness to the focus of the office.