Farm Ireland
Independent.ie

Thursday 19 October 2017

Farming review of 2010

Caitriona Murphy

Caitriona Murphy

Last year will go down as one of salvation for agriculture, following a disastrous collapse in incomes in 2009.

Farming bounced back in dramatic fashion over the past 12 months, with an excellent year recorded by the sheep and dairy sectors.

Meanwhile, the fortunes of tillage growers changed spectacularly on the cusp of the harvest.

Here, Caitriona Murphy recalls the highlights and lowlights of the past 12 months.

January

The year began on a cold note, with farms held in an icy grip and fodder prices on the rise. Sheep were lost in snowdrifts in mountainous areas, while fodder was airlifted to some farms and farmers struggled to keep animals adequately watered.

Less than a month after its launch, the Quality Payment System was under fire from farmers unhappy with the base price and penalties. ICSA called on its members to hold back stock and the ICMSA demanded the grid be set aside pending further consultation with farmers. Smaller factories simply ignored the grid and continued to buy cattle on a flat-rate basis.

Meanwhile, the demise of high-priced 'development land' was confirmed as property surveys showed average agricultural land prices fell back to €8,800/ac in the previous 12 months. On a positive note, opening fertiliser prices in 2010 were down €120/t on the previous year.

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February

The factory price grid came under more pressure as the ICMSA claimed the grid would cost farmers €13-16m per year, based on the previous year's kill.

IFA president John Bryan said the grid was "handled disastrously", before issuing a list of 'deal breaker' demands for change to Meat Industry Ireland.

Teagasc analysis showed that intensive and full-time farmers would be the biggest losers if the single farm payment were changed to a flat-rate system, while suckler farmers and sheep farmers would benefit.

Hopes of an early lift in milk price were dashed when the Irish Dairy Board cut skim milk powder and butter prices by the equivalent of 1.25c/l.

Most co-ops held milk price around 25c/l.

Meanwhile, malting barley growers waited anxiously to hear their fate after Greencore sold its malting business to French co-operative giant Axereal for €112m.

March

The Department of Agriculture outlined plans to slash environmental payments to farmers by up to 70pc in the Agri Environment Options Scheme.

The scheme was limited to 10,000 farmers and had a maximum annual payment of €5,000 per farmer.

Financial pressure on farmers was in the spotlight, with some individual farmers carrying overdrafts of more than €100,000 and other farmers selling off breeding livestock to pay bills.

Glanbia Co-op outlined its plan to buy out the Irish milk processing, consumer foods and agri-trading business from Glanbia Plc, a deal that would require the backing of 75pc of the 7,250 co-op shareholders.

Meanwhile, farm groups highlighted unworkable calendar farming rules in the review of Ireland's Nitrates Action Plan.

April

Flooding hit the west and midlands in the wake of heavy rainfall in early April, while hilly areas in the northern half of the country were covered in snow.

Mechanical graders in slaughter plants incorrectly graded more than 250,000 cattle in 2009, a Department of Agriculture investigation revealed. More than 9pc of conformation grades and 7.5pc of fat scores were wrong.

Milk price moved upwards to 27c/l and Glanbia Co-op officially lodged its bid to take over the Plc's Irish operations but there was strong opposition from a minority of shareholders.

Lamb prices at the factories moved to their highest level in six years, with base prices of 580-600c/kg. Confidence among sheep farmers was further bolstered by the Department of Agriculture announcing a €54m sheep grassland scheme, which amounted to around €10/ewe.

May

Glanbia Co-op shareholders narrowly rejected the proposal to buy out the Plc's Irish operations. The motion needed the backing of 75pc of eligible shareholders, but the 'yes' vote fell short by 2pc.

Meanwhile, gorse fires raged across much of the west with farmers blamed in some instances for losing control of planned burning on commonage land. Coillte and private foresters claimed in excess of 1,500ac of plantations were damaged at a cost of more than €2m.

A serious rift developed within the ICSA between the national council and the national beef committee, with the latter group opposing the quality payment system for cattle.

Meat Industry Ireland temporarily suspended the 6c/kg penalty for cattle with a fat score of 4+ until July, while a penalty of 6c/kg would apply for 4= animals from November.

June

Soaring green diesel prices and the impact of the carbon tax added to the financial pressure on farmers and contractors, with diesel prices up 44pc on the previous year.

Figures showed that farm incomes had collapsed by 40pc since 2007 and fewer than one in 10 farms were generating an income of more than €25,000.

The IFA warned that Ireland's beef and tillage sectors stood to lose €350m if the EU/Mercosur trade deal was agreed, due to increased imports from South America.

Meanwhile, the Leaving Cert agricultural science exam was denounced as a 'travesty' after students were asked about subjects not covered in the syllabus.

July

Farming was flavour of the month in July as Minister for Agriculture Brendan Smith launched the ambitious Food Harvest 2020 report.

The report targeted a 50pc increase in dairy output, a 20pc lift in beef and sheep production and a 50pc hike in pigmeat production. The overall target was a €5bn increase in exports to €12bn by 2020.

Teagasc said it would be forced to turn away hundreds of students from agricultural courses in the autumn as applications for agriculture and food courses jumped by 30pc.

CAO applications from Leaving Cert students for Agricultural Science in UCD were up 10pc, on top of major increases in 2008 and 2009.

Meanwhile, Scottish MEP George Lyon delivered a report to the European Parliament calling for a strongly funded CAP to continue. The report looked at how the Parliament wanted farm policy to evolve post-2013. Worryingly for Ireland, it proposed a move away from the historical calculation of the SFP.

August

Grain prices rocketed internationally when Russia, the world's largest and cheapest exporter of grain, announced it was banning grain exports until the end of the year.

Irish prices climbed steadily on the back of the international turmoil.

Dried wheat prices on offer from Irish merchants jumped from €120/t to €170/t in the space of weeks. However, farmers were warned that the ever-increasing grain prices would translate into higher prices for compound feed rations.

Visitors to Tullamore Show were bathed in sunshine. It was a welcome change from the downpours that had caused the cancellation of this event in previous years.

Sadly, Teagasc research revealed that farmer suicides had increased by 24pc since 2009. Financial pressures, social shifts and the speed of change in agriculture were identified as contributory factors in the rise.

September

Kerry moved to close a deal to buy Newmarket Co-op for €33m -- worth €39,000 each to Newmarket shareholders.

The Farming Independent's annual Ploughing Championships survey found that 45pc of farmers would prefer to stick with the historical calculation method for the Single Farm Payment (SFP), while 42pc backed a flat-rate approach.

The same survey found that, in relation to the quality payment system for cattle, 48pc of all farmers questioned came out against the grid, 26pc supported it and the remaining 26pc were undecided.

Meanwhile, Scottish MEP George Lyon warned Irish farmers that they could lose out in CAP negotiations if they continued to argue for the historical SFP calculation.

At the same time, EU Agriculture Commissioner Dacian Ciolos hinted that support for grass-based payment systems could feature in a revamped CAP.

October

The Department of Agriculture came under increasing pressure to speed up the processing of Disadvantaged Area payments as farmers learned that digitisation of maps was to blame for delays in payment.

As the weeks rolled on, the delays held up €175m of Disadvantaged Area payments and Single Farm Payments for 50,000 farmers.

Fears grew that some payments could be delayed by up to three months.

On his first official visit to Ireland, EU Agriculture Commissioner Dacian Ciolos indicated that a ceiling or cap could be applied to individual single farm payments post-2013 and warned that redistribution of payments was imminent.

Bord Bia announced a carbon audit for farms in its Quality Assurance Scheme, based on the environmental sustainability of their farms.

The audit was designed to give Irish beef a competitive edge over its international rivals.

November

The European Commission insisted that there was no reason to revisit the gradual increases in national quotas until the end of the quota system in April 2015.

UCC agri-food economist Dr Michael Keane, on behalf of the ICMSA, estimated the dairy industry would need an initial investment of €150m or €15.8m annually to increase milk production by 20pc.

Meanwhile, the European Court of Auditors issued a damning report that criticised the decision to close down Greencore's sugar processing plant in Mallow, claiming it was based on poor information on the productivity of the Irish sugar sector.

Furious former sugar beet growers called for the industry to be revived in Ireland.

December

Agriculture was one of the only sectors to escape swingeing cuts in an austerity Budget.

Despite fears for the Agri Environment Options Scheme, suckler cow payments and stock relief, they all survived Finance Minister Brian Lenihan's axe.

However, farmers, like all taxpayers, were hit by tax changes and the universal social charge, among other Budget measures.

For the first time in years, the agriculture and food sector was touted by the Government as a driving force in the recovery of the Irish economy.

Despite succumbing to another freezing spell, the year ended on a positive note for farming, with forward prices of grain on the up, milk price at 30c/l and the confirmation that farm incomes had increased by 46pc since 2009.

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