The agriculture and food industry has a big contribution to make to the recovery and renewal of our economy. It has an equally big contribution to make to community well-being and the fabric of rural life.
The sector brings in €24bn to the economy. It’s responsible for almost 10% of exports and provides 7.7% of employment. When jobs in inputs, processing, and marketing are included, the agrifood sector accounts for almost 10% of employment.
Members of the Irish Co-operative Organisation Society (ICOS) play a crucial role in these outputs, including the dairy processing co-operatives, and livestock marts, which have a combined turnover in the region of €14bn, with some 150,000 individual members employing 12,000 people in Ireland, and 24,000 people overseas.
The dairy sector showed a positive improvement in 2013. Demand for dairy products internationally was strong, with high commodity prices. Milk prices for producers increased to an average of about 39c/litre and supplies were some 3.5% higher.
For 2014, global indicators are pointing to an increase in worldwide supply of milk, which will inevitably affect price from the middle of the second quarter onwards. However, combined with falling feed and fertiliser prices, the outlook for dairying still provides grounds for optimism. Milk prices could retain a good portion of the gains made in 2013 despite a pending super-levy bill for the year forecast to be around €15m.
With a growing world population and continuing growth of about 2% per annum in demand for food, Ireland is targeting a 50% increase in agrifood output by 2020. With the abolition of milk quotas, producers are keen to expand their enterprises.
At a processing level, some €500m has been spent on capacity and value added in the last few years. The dairy sector is strongly focused on real markets. The fat portion of production (butter and cheese) is largely targeted at strong EU markets. Protein production is increasingly targeted towards infant formula, ingredients, and consumers in high-growth, developing countries.
Efficiency, processing co-operation, and further industry collaboration must also form part of the equation where consolidation in Ireland is challenged by the more rapid consolidation of some global competitors including co-operatives and firms.
The co-operative marts are vibrant and thriving. Ultimately, their role is to improve price transparency in the cattle sector. Marts do this through a live auction system that allows a certain volume of stock to be sold and exported live. This provides farmers with a valuable, transparent counter-acting force to the dominance of a small number of privately owned beef-processing factories.
That dominance is compounded by the application and interpretation of questionable movement and labelling restrictions, for mart-auctioned livestock, implemented by processing factories and large UK retailers under the pretext of animal welfare and quality considerations. These restrictions are resulting in the hampering of live cattle exports from Ireland to the UK with a consequent stifling of overall competition and a negative impact on the price of such cattle in livestock marts.
As we look positively to the future, we need to ensure that the free market and Ireland’s agrifood industry success will benefit everyone from farm to fork. That is the agenda which ICOS is continuously pursuing.
Bertie O’Leary is president of the Irish Co-operative Organisation Society, which had its AGM in Portlaoise, Co Laois, yesterday.
21 Nov 2023