Retail ‘price wars’ have created ‘unsustainable farm gate prices’, say vegetable growers

IFA says crisis was "inevitable" and urges retailers to "restore a viable margin for the primary producer"



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22 February 2016

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Low farm gate prices and ongoing adverse weather conditions have created a crisis for the country’s vegetable growers, IFA field vegetable and protected crops chairman Matt Foley has warned.

Exceptional levels of rainfall and mild weather have led to quantity and quality issues on all winter field vegetable crops. Waterlogging and higher disease levels have resulted in crop losses running up to 30% across all lines. According to the IFA, entire farm businesses are now in jeopardy in some cases.

The IFA chairman emphasised that this crisis was inevitable and has been flagged by the IFA to retailers for some time now. “Continuing price wars among the retailers has resulted in unsustainable farm gate prices,” he said. “Growers have limped along with poor returns and survived only due to exceptional yields and recent benign winters. However, the current crisis was always a question of when – and not if – it would occur. Existing producer returns include no accommodation for natural yield reductions and leave no leeway for reinvestment in farm businesses.”

Foley has demanded an immediate review on the farm gate prices currently being paid to producers, who are supplying vegetables at a loss. He added that growers are currently making decisions on planting programs and many are debating the viability of proceeding at current farm gate prices, while input costs – including the recent increase in the minimum wage – continue to rise. He concluded that retailers must be genuine about supporting Irish produce and restore a viable margin for the primary producer.

Pig price drop

The IFA has also spoken out about the drop in pig prices announced on 19 February. IFA National Pigs Committee chairman, Pat O’Flaherty said the association is completely outraged at processors’ decision to drop pig prices.

“Prices now being paid to farmers are simply not sustainable and this price drop will be the final straw for many,” O’Flaherty said. “At an average price of €1.34/kg and production costs at €1.58/kg, how can farmers be expected to survive and produce pigmeat?”

O’Flaherty added that other players in the industry need to be held accountable for this current crisis, including the millers. “The IFA is demanding millers reduce prices of compound feed rations in line with reduction in raw material costs with immediate effect,” he said.




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