Risk management was one of the ‘buzz terms’ trotted out by all of the farming organisations in attendance at this year’s National Ploughing Championships in Co. Laois.
Teagasc, the Irish Farmers’ Association (IFA), the Irish Grain Growers’ Group (IGGG) and Irish Creamery Milk Suppliers’ Association (ICMSA) – they were all going on about it.
And all of this is highly wonderful provided everyone within the ‘circle of trust’ plays along.
All of this came so clearly into my head when IGGG committee member, Pat Cleary, told me that mills in Ireland are not prepared to offer a forward price for cereals combined next harvest.
So here comes a fundamental fact – managing risk does not work if it is a case of leaving the farmer with all the worry.
How often have we seen scenarios in the past within which the farmer was left carrying the can?
The most recent example of this was the case of dairy farmers who agreed forward pricing deals with the co-ops, only to have the carpet pulled from beneath their feet at two levels i.e., their inability to secure the fast-moving farmgate price increases of recent months.
And, at the same time, having to suck up the horrendous cost of inputs.
In the case of cereals, the farmers, input suppliers and grain buyers must all be singing off the same hymn sheet. Everyone involved must assume a modicum of risk on the same terms.
Sticking with tillage, I see no reason why grain farmers should not be able to sell an agreed proportion of their crop at an agreed price, with all input costs similarly locked in.
Such an arrangement gives the farmer some hope of at least making profit on a proportion of his/her crop.
Meanwhile, Ireland’s fertiliser suppliers are in the throes of developing a report, which will address how they best can move forward in these volatile times.
Let’s hope that the final document proposes a degree of cooperation between the fertiliser industry and production agriculture, one which recognises the need for all parties involved to accept the principle of equivalence, where future risk management is concerned.
The farming and food supply chain is very easy to work out. Every sector within it works off a margin, except the farmer.
The primary producer is left with only himself or herself to talk to. This model of operating has to change.
It is totally unfair that farmers continually take all the risk while those further up the food chain work within margins that give them a fighting chance all the time.