Farm Ireland

Tuesday 21 August 2018

Analysis: Breakthrough deal has to benefit farmers to be seen as a real success

Margaret Donnelly

Margaret Donnelly

Ireland’s latest deal to get beef into China is welcomed by industry, but its success can only be judged by the return to farmers.

This year is the year of the dog in the Chinese calendar and the next time it will come around again will be 12 years’ time – 2030.

Twelve years is a long time and could see a hugely different economic landscape for the Irish agri-food sector.

With Brexit looming on the horizon it’s putting a big black cloud over our most profitable beef market and where around 50pc of our beef currently goes.

Any hindrance to that market would be a disaster for Irish beef exports and has the potential to destroy our beef sector.

Quite simply, if there are additional costs or barriers or a lack of regulatory alignment for Irish beef going into the UK after Brexit happens, which is due to happen in less than 12 months, it could simply mean Irish beef going into the UK will have to find a new home.

And we don’t have enough other markets built up to take that surplus beef. The former agriculture minister Simon Coveney said in 2015 that the US market for Irish beef could be worth €100m – yet we’re no where near the colour of that three years on. Last year, less than €8m worth of Irish beef found a home in the US.

He also said back in 2015 that Irish beef exports to China could be worth €100m and that he expected Irish beef to be in China by that autumn.

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The three-year delay to today’s announcement simply shows how difficult and slow it is to get into new markets.

It’s easy for ministers to throw out potential top-line figures, but achieving them is another thing and as for farmers seeing any impact on beef prices, well that’s anyone’s guess but I imagine you’d struggle to find a beef farmer in the country who expects the price of beef to rise anytime soon.

And that’s key. Will there be any price improvement? We’ve heard for years how profitable the agri-food sector is, how important it is to the economy and how much growth potential it has. Six successive years of growth in the value of agri-food exports have yet to translate into any real increase in farm incomes.

But, where has the value been felt? The primary producers in this instance – beef farmers – have some of the lowest incomes in the agri sector. Being the first European country to gain access to China for its beef is a great achievement, but farmers are entitled to be cynical too. 

If there is any takeaway from this Chinese deal it has to benefit farmers directly to be judged a success.

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