Producer groups: ‘Reality is retailers and processors hold all the cards’

Producer groups have “shown their ability to organise farmers very well and negotiate additional top-up bonus prices with processors”, according to the Irish Farmers’ Association (IFA).

However, the meat plants have found a way of undermining this by using very low quoted prices every week, IFA president Joe Healy told attendees at a seminar on producer organisations today (Tuesday, March 5).

Healy said: “We are also aware of numerous situations where processors and agents have used every trick in the book to pick off members of producer groups to see if they can divide and break up groups”.

According to the IFA, while a lot has been said at government level about the opportunity for beef farmers to set up producer organisations, the reality is the dominant retailers and meat processors hold all the cards.

Producer organisations need a lot more support and particularly financial support from the Department of Agriculture, according to the organisation, which asserts that €1,500 to set up a group and €1,500 for legal advice is not sufficient.

Groups need ongoing support on an annual basis, especially in the early years to keep going, if they have any chance of being able to stand up to the dominance of the powerful retailers and processors.

The food supply chain is characterised by a concentration of buying power in the hands of a small number of powerful retail groups, the IFA says.

In Ireland alone, the top three of SuperValu, Dunnes and Tesco have 67% of retail food sales. Two multinational discounters Aldi and Lidl have another 21.5% market share, while on the beef processing side, ABP, Dawn and Kepak have 65% of the total market between them.

“As farmers, this is the power of the retail and processing sectors we are up against. The IFA wants to support producer organisations, where farmers wish to set up groups.

“We have registered with the Department of Agriculture as an approved facilitator.

“We are available to help and assist any group of farmer members wishing to set up a producer organisation in any sector,” he said.

Claiming to be key to the formation of up to 60 farmer co-operatives in livestock marts and the establishment of groups and co-ops in the dairy sector, the IFA also says it was instrumental in establishing up to 20 producer groups in the sheep area, as well as beef producer groups over the years in counties Laois, Monaghan, Cork, Longford and Louth.

“Family farms are been forced out through globalisation and the constant race to the bottom on prices,” Healy said.

Farmers cannot survive the downward price pressure being pushed back against them.

“In Ireland, the establishment of co-ops by farmers have proven to be a major success and has delivered in spades for farmers. This is particularly the case in dairy processing and also in livestock marts. It’s not the case in beef, sheep or pig meat processing.

“As chairman of the COPA group on the food chain, I have worked hard at EU level, with Commissioner Hogan, in driving change on unfair trading practices and increased transparency across the food chain.

“We have made some progress, but a lot more needs to be done,” Healy said.