“Risk and opportunity must be seen as two sides of the same coin where, if we can effectively manage, embrace and monetise the risks that surround us, then our businesses should continue to grow and prosper,” ICOS President, Michael Spellman told the 42nd ICOS National Conference in Naas, Co. Kildare, today.
The conference was attended by co-operative leaders from all over Ireland, including dairy processors, livestock marts and community based enterprises. It was addressed by high level speakers including: FBD CEO, Fiona Muldoon; John Jordan, CEO of Ornua; Guy Smith, Deputy President of the National Farmers Union (UK) and others including figures from the fields of industry, business, research, climatology and regulation.
“The time frame in which risks present themselves, and be mitigated, has tightened with considerable change and volatility in world markets, in geopolitical affairs and in the environmental matters that we must all now have regard for,” said Michael Spellman.
A series of workshops addressed key areas of Sustainability, Mart Health & Safety and Corporate Risk within the co-operative sector including concepts of environmental sustainability as the ‘new quota’, the challenges around water quality, greenhouse gases, ammonia emissions from farming and the preservation and promotion of biodiversity.
“Our national and sectoral commitments to the environment, and how we address them, will be defining for us as an industry. We hold our sustainability credentials very dearly, but they will be used against us unless we build on them, improve our position, and demonstrate the quality of our proposition to customers, regulators, and fellow citizens.”
The priority of maintaining co-operatives and their aligned processing businesses in farmer ownership received attention in a case study of farmer owned Murray Goulburn which fell into private ownership in Australia earlier this year with little return of value to farmers.
“Retaining farmer control over our routes to market is essential and this requires continuing investment, growth and development of our co-operatives. The directors of co-operatives operate in a very complex business environment with a responsibility to run them prudently, to establish an appropriate risk appetite, and to manage those risks appropriately. That takes continued commitment on our part to invest in and to commit to our businesses that previous generations worked so hard to build,” said Michael Spellman.
The ‘bizarre weather events’ of the past year also came under the spotlight at the conference, which resulted in a very difficult period for farmers and their co-ops. These challenging climate events of 2017 and 2018 has highlighted the importance of a strong co-operative sector, that will not hesitate to show solidarity and support to member suppliers during challenging times.
Michael Spellman said, “It’s a fact now that we really can’t predict what the elements will throw at us. We need to build resilience into our farming systems to survive such events as the new normal, and we need to build our co-operative balance sheets to allow them to continue the extraordinary level of support they demonstrated in recent years, and in particular over the past year during the fodder crisis.”
Commenting on Brexit and CAP, Spellman said, “The EU is losing one of its biggest net contributors and that has resulted in other member states having to increase their individual contributions to address the shortfall. In addition, Europe has identified new ambitions, which puts pressure on existing funds. But we have said quite clearly that new ambitions need new money.”
“Recent comments from Commissioner Hogan are reassuring because he is taking the future of European Agriculture very seriously with his statement that ‘farmers have to be put first’. 46% of the incomes of all EU farmers comes from direct payments. Resources will need to be targeted towards the ‘active farmer’. There is a commitment at Commission level, regarding the 2020 -2027 proposals, that approval for member state plans will not be given unless the issue of generational renewal is addressed. So it’s clear that the public will always have to acknowledge the importance of farming.”
The meeting also heard that the marts sector simply cannot afford to see insurance premiums spiralling in cost. Throughout this year, marts have been implementing extra measures to reduce health and safety risks. Delegates were told that ICOS is promoting a collective and co-ordinated response across the marts sector to ensure that no single mart will be disadvantaged as a result of any measures which need to be adopted.