Support for small farmers
The Oireachtas Agriculture Committee has called for more action to ensure that new Grocery Regulations support primary producers. eolas reports.
The Irish Farmers’ Association has briefed the Oireachtas Joint Committee on Agriculture about the challenges facing the horticulture sector, in particular the threat of below-cost selling.
Although only a small sub-section of the wider agricultural sector, horticulture is a significant contributor to the economy and to rural communities. An estimated 6,000 people are employed in primary production and a further 10,000 people work in the associated downstream businesses. Irish horticulture has a farm gate output figure of €395 million and, in 2013, the fresh produce market was worth €1.2 billion.
Addressing the committee, IFA Chairman Matt Foley identified the dominant position of large retail groups as being the single biggest threat to the horticulture industry. Ninety-five per cent of the buying power within the market is held by five major retailers. Smaller suppliers and family businesses are unable to compete with strong bargaining which often force prices below the cost of production. While production levels of edible horticultural produce have been consistent in recent years, the pool of suppliers continues to shrink. Foley warned that any further reduction in the number of growers could undermine the sector’s ability to supply certain products.
Due to this market imbalance, farmers can be compelled to accept unreasonably low prices which do not cover costs or produce an economic return. In a battle for market share, produce has been used as a loss leader to encourage store footfall by retailers. The long-term consequence is lower prices for farmed produce, threatening the sustainability of the horticulture sector.
Foley asserted: “This vulnerable sector is under particular pressure from retailers and will not survive the price war if the Government does not take action.” The Agriculture Committee also heard that, while the EU allocated €800 million to producer orgainisations (POs) last year, vegetable growers have been reluctant to join them due to restrictions, cost and paperwork.
In response to the IFA, the joint committee expressed unanimous support for increased measures to deal with below cost selling. The committee also called on the Department of Agriculture, Food and the Marine and associated agencies, to be proactive in POs to get EU funding.
The joint committee also wants the new Grocery Regulations, contained within the Competition and Consumer Protection Act, to rebalance inequality within the supply chain. The committee has called for the newly established Competition and Consumer Protection Commission to use its investigation and enforcement powers (which include naming and shaming) to facilitate this process and ensure retail compliance with regulations.
Committee Chairman Andrew Doyle stated: “We firmly hold the view that the Irish consumer, given a preference, will buy home-grown, fresh, sustainable fruit and vegetable produce, so it is vital that every effort be made to ensure the sector can compete on a level playing pitch.”
