Volatility is a threat to achievement of national Foodwise Targets

Impact of Brexit on Ireland’s agrifood industry must be minimised

“Budget 2017 offers the Government a real opportunity to address milk price volatility which is one of the most consistent and damaging issues affecting Irish dairy farmers”, ICOS has stated in its pre-budget submission to Minister for Finance, Michael Noonan and the Minister for Agriculture, Michael Creed.

In the submission, ICOS President Martin Keane said, “An imbalance in the global demand-supply equation for dairy products has resulted in a sharp decline in milk price since August 2014. The prolonged nature of the current price trough requires a fresh approach and an urgent rethink from policy makers at an EU and National Government level.

“The European Commission has introduced two support packages – September 2015 and July 2016. While welcome, it must also be acknowledged that the Irish co-ops have supported their members significantly over the last two years, way in excess of the direct aid packages provided by the EU.

“It is vital for the Government to recognise the contribution made by rural co-operative enterprises and their members, through the provision of employment, but also through the use of a range of direct and indirect inputs, creating a multiplier effect within the rural economy.  Put simply, co-ops are the backbone of many rural towns and villages throughout Ireland.

“However, volatility remains a significant threat to the achievement of the Government’s Food Wise strategic vision for the agri-food sector, as it is increasingly difficult for a sole trader, family farm run dairy enterprise to cope with price volatility ranging by plus or minus 24c/l.

“ICOS acknowledges that there is no silver bullet to the issue of volatility, but we strongly believe that a suite of measures are needed. ICOS has extensively engaged with Government Departments and stakeholders over the previous 12 months on this issue. As a result, ICOS is proposing the introduction of an Income Stability Tool – a co-op structured agri-taxation measure that would allow a farmer to voluntarily defer up to 5% of his income during a year, to be drawn down any time within 5 years. This would allow a farmer to draw upon additional revenue when needed most.”

“In addition, the reality of Brexit and its consequences for the Irish agri-food sector needs to be fully understood by the Government before the beginning of formal negotiations between the EU and the British Government,” said Martin Keane.

“In 2015, Ireland exported €5.1 billion worth of agricultural products to the UK market, including €970 million in dairy products and €1.1 billion in beef products. A range of issues will require careful consideration by Government at the highest level, including market access, administration and customs, equivalence of standards and the impact on the EU budget. Fundamentally, the Irish Government must ensure that the impact of Brexit is kept at the very minimum.

“The ICOS Pre-Budget Submission is proposing a range of initiatives that, at its heart, aims to support and maintain the economic wellbeing of the rural economy. Our submission includes a range of measures dealing with dairy market volatility, the development of a co-operative investment scheme, the provision of EIB loans, the cost burden imposed on livestock marts, an audit exemption for smaller co-ops and the promotion of renewable energy,” Martin Keane concluded.

The submission is available here.

INFORMATION:

Eamonn Farrell

Agri-Food Policy Executive

Tel Direct: +353 1 6131 343

Mobile: +353 86 076 7840

Email: eamonn.farrell@icos.ie