Farm Ireland
Independent.ie

Saturday 19 August 2017

Axe controversial price grid now urges ICMSA

Martin Ryan

The immediate withdrawal of the quality payment system (QPS) for cattle has been sought by the ICMSA national council.

The association claimed the grid's introduction had resulted in returns to producers being slashed and would cost farmers several million euro every year.

The national council, which met in Limerick on Friday, called for a more simplified grid, reduced price differentials, quality assured bonus for all animals from QA farms and the abolition of the 30-month threshold on beef animals.

A comparison of actual average prices paid for O grade cattle pre and post-QPS, based on prices published by the IFA, has shown that producers of O grade animals could lose up to €4m on a full year's production arising from the widening in the price differential from base.

The council unanimously adopted a resolution which sought the immediate withdrawal of the present price grid.

The ICMSA called for the introduction of a simplified grid with not more than 25 categories (5 x 5), the reduction of the price differential and no more than five price bands.

The council also called for QA scheme payments to apply to all cattle from QA farms, Department of Agriculture monitoring of beef carcass grading on an ongoing basis and that the 30-month threshold be abolished.

The meeting also endorsed the demand for an independent audit of the operation of the price grid in terms of the total payout to farmers.


Analysis of the IFA-published average prices paid for steers on the week ending December 12 (pre-QPS) and January 24 (post-QPS) shows that the differential for O grade animals with R grade has widened from 14c/kg to between 17c/kg and 22c/kg.

Cost

Therefore, the change would cost producers of O grade steers in excess of €4m in a full year based on last year's kill. Producers of U grade steers are set to benefit by less than €1m on the same price comparison.

The January 24 prices are the average paid to farmers by the processors, as obtained by the IFA from the Department of Agriculture, and therefore include a full mix of prices.

Cattle bought on a flat price, special direct deal prices and bonus payments for quality and the benefits of the temporary concessions under the QPS are included.

"The direct comparison payout is a factual assessment that shows there is need for full transparency to ensure the confidence of farmers in the system," said ICMSA chief executive Ciaran Dolan.

"As every week goes by the number of farmers with no confidence in the system is rising and we have to set about a simpler system that farmers can understand. At the moment Irish farmers have the most sophisticated price grid and the lowest prices," Mr Dolan added.

Irish Independent