The Irish Grain and Feed Association (IGFA) has called for “fairer dealings” between primary production and the processing and retailing sectors.
The organisation’s calls come on the back of a major grain price hike that followed in the aftermath of devastating droughts in North and South America earlier this year, and the adverse weather conditions in Ireland during the summer months.
“These price spikes have resulted in increased pressure being put on farmers and their suppliers across the country,” President IGFA, Michael Phelan said. “More needs to be done to protect the primary suppliers in the food chain because we have suffered major price spikes in 2011 and 2012 and this is incredibly serious for the sector. Compound feed manufacturers play a key role as a buffer for absorbing price shocks on raw materials to reduce pressure on livestock farmers.”
The representative body for the grain and feed merchants in Ireland also pointed out that the adverse weather conditions, meant their members were forced to extend credit to farmers at “unsustainable levels” and highlighted the negative impact that the “lack” of forward contracts for farm products was having on the industry.
“Primary producers are carrying most of the risk in these volatile markets and a properly drafted code of practise for the food chain could help ensure they, and farmers, are protected, while greater transparency could be mandated on retailers’ margins,” Mr Phelan continued.
“This buffer function, however, has limitations and the only way forward for the livestock producer to maintain their economic viability is to transmit price rises upward along the chain. In layman’s terms, the brunt of these unpredictable price shocks can no longer be carried by those at the bottom of the chain and as an organisation, while we have been in intense negotiations with the banks to open up working capital for farmers to ease the burden, more is needed.”
In conclusion the IGFA president stated, “Everyone knows the cost of production at the lower end of the chain; now it’s time for the food industry and retailers to take some of the risk in ensuring there is a future for family farming and their suppliers in Ireland”.