Politicians must be honest with public about the cost of food

When the Dáil turns its attention to farming or primary food production, one cannot but be struck by the little knowledge that exists of what is an amazingly important sector for the entire country. The recent Dáil exchanges were irritating to say the least: the spectacle of senior politicians standing up to denounce the prices of food to the public without even once acknowledging (a) the historic and astronomically expensive transition to more sustainable farming and food production we are engaged upon, and (b) the role in food inflation played by the regulations and rules foisted on the farmer primary producers by politicians who served in successive governments.

Cheap is not cheerful

Is it not time to end the charade and actually tell the general public that the ‘cheap food’ era is over? At what stage do our politicians intend – if ever – explaining that the twin pillars of the EU’s food policy – Common Agricultural Policy (CAP) and cheap food at retail level – are both now effectively overtaken by sustainability targets and the fast-declining value of direct payments? When are we going to hear a politician say what is a self-evident truth in plain view of anyone who cares to look?           

Like anyone connected with the farming and wider food sector, the ICMSA understands perfectly why consumers are perplexed by the fact that food inflation was rising faster than any general consumer inflation index. But we as farmers also know and can prove that the prices we are receiving are only marginally ahead of the costs of production – and have been effectively static for 30 years. Adjusted for inflation, we are getting, more or less, the same prices as our parents received 30 years ago. Interestingly, the average Irish family in 1980 spent in excess of 35 per cent of its disposable income on food and drink. That percentage now – and despite the high-octane protests in the Dáil – is the lowest in Europe at less than 10 per cent. We can also point out that as a matter of verifiable fact, every single input on our members’ dairy and beef farms has increased in cost and very often in excess of any rise in output price received by the farmer. The bottom line here is that farmers can no longer afford to absorb the increased costs in producing food out of their own pockets. We can’t afford to, and even if we had the money, why should farm families be subsidising the cost of food for families with usually higher incomes? That day is over. It’s gone. It was just about sustainable then, but it is not sustainable now. This idea, this delusion, that all the extra costs involved in producing milk or beef, are going to be picked up by the farmer is gone and is never coming back.  The politicians must understand that, and we’ll keep saying it til they do. 

Facing reality

This is not a criticism of the consumers – farm families are consumers as well – our criticism is of the politicians who have conspired to create this fantasy that we are going to transition to a wonderful new highly regulated, lower volume, food-production system with all the changes happening from the supermarket fridge ‘backwards’ to the farm and no price change for the consumer, is not just a delusion, it’s just wilful ignorance. The cost of producing food has gone up, will go up further, and the consumer price will reflect this reality.

It’s very simple: production costs are increasing, and volumes are falling as regulations and sustainability requirements take effect. Whether they like it or not, everyone must accept that current food prices are not any kind of artificial ‘spike’, they are the real costs – economic and environmental – of getting food of the quality demanded into retailers’ fridges and available to the consumers.

That’s what’s costing us farmers to produce it and we cannot continue to carry everyone else via the ‘cheap food’ policy where CAP direct payments were meant to ‘top up’ the below-production return we got from the retail corporations. The direct payments farmers receive under CAP have been consistently undermined by inflation and convergence and they no longer even pretend to make up the shortfall between the real costs of producing food and the price consumers feel like paying.    

Regulator role

This is all perfectly obvious, and politicians expressing indignation about the increased costs are being, at best, disingenuous. It’s a matter of spending five minutes on Teagasc’s website to investigate the costs incurred by farmers or to establish the costs of producing a litre of milk or kilo of beef. The mystery – if there is a mystery – begins from that point. No-one knows how the retailers arrive at their price, which is actually the one that should be the focus for the politicians. The last Government established an office of Agri Food Regulator (An Rialálaí Agraibhia) and if the politicians are really sincere about working out who’s getting what on the price of food, then they should instruct the agri-food regulator to resolve this mystery and provide it with the necessary powers to do so. It would be more useful than grandstanding in the Dáil and pretending that food and the production of food by farmers are supposed to be magically immune to the inflation that affects everything else.