Government Oppose Aontú Bill Banning the Below Cost Sale of Beef - Tóibín
The Aontú Equitable Beef Price Bill which reached 2nd stage in the Dáil today will be opposed by the government. Commenting on the government decision, the author of the Bill Aontú leader and Meath West TD Peadar Tóibín stated:
“This is an incredibly disappointing decision by the Government. FF supported this Bill when they were in opposition and now seek to shut down this opportunity to protect farm prices. Farming is in crisis in Ireland. Factories and supermarkets are squeezing farm prices all of the time. Often pushing prices below the cost of production. Turn that around for a second imagine if someone asked a Minister to work a 70 hour a week, attend the Dail, develop legislation, meet and represent constituents. Imagine if they asked you to do it for a wage less than the actual cost of doing the work. You would tell that person to get stuffed. No other sector would accept it.
A new report by Teagasc has indicated that across all farm types average incomes have dropped by 57% in 2023 to just under €20,000. This is massive fall. If were to happen in any other sector, it would be front page news and it would dominate the Dáil debates. It shows beyond a doubt that farming is no longer a sustainable livelihood for most families.
According to Teagasc 1/3 of farmers are making a loss. Many are going into debt. Many of them are in poverty. 1/3 of farmers are only making a living because someone in the family is working off the farm to supplement the income of the farm. Only 1/3 of farmers currently are actually making a living from farming.
That’s an incredible situation. One of the most important sectors in society, the sector that produces our food and the sector that’s the backbone of our rural community is collapsing.
Even if you had no interest in farming families or rural Ireland, this is a very serious issue. If here are no farmers, there is no food and as a result there is no future. Food security has increased in importance in the last few years.
The Russian invasion of Ukraine shut down so many supply chains leading to products not being available but also to significant inflation. Covid too shut down so many supply chains and created enormous product inflation. Even the Suez Canal blockage had an effect on supply and prices in some areas. Food security necessitates a viable farming sector.
The damaging being done to Farmers is affecting rural and regional Ireland. If the family farm dies so too does rural Ireland. Food lots, industrial farms may keep production up, but they won’t send children to local schools, buy in local shops, play for the local football team and socialise in the local pub.
You might think that there is no money in food. But this is not the case. Food production is a multibillion euro industry. It’s a highly profitable industry. There are three elements in the food supply chain. Farmer, food processors and that Supermarkets. Farmers do by far the most work but they receive the least amount of profit.
Food processors on the other hand are very profitable. Profits are very well hidden in the beef processing sector. One such beef processor had an income of €4billion in 2022. Profits are estimated to be over €200m and tax is paid through a network of holding companies in Britain, the Netherlands, Luxembourg, Liechtenstein, and Jersey. Its estimated that the actual tax rate paid may be as low as 2%.
Supermarkets are also raking the profits in. Again profits often well-hidden but its reported that Tesco are make €104 million in profit in 2023.
SuperValu saw revenues increase to €4.7bn during 2022 and saw profits after tax reach nearly €100m. Aldi Ireland makes €2.03bn and has profits of €17.2m
The truth is the food market in Ireland operates as an oligopoly. A small number of supermarkets and beef barons have massive buyer power, they have control over all aspects of the market. As a result they are making super normal profits.
In the long run to fix this situation we need a stronger competition authority. We don’t have that yet. In the short term we must seek to rebalance the market to ensure the fairer distribution of profits to all aspects of the food supply chain. The first step along that way is the Aontú Equitable Beef Pricing Bill. If enacted, this Bill would ban the below-cost sale of beef, ensuring that farmers make at least a break-even price for their produce. This would strengthen the hand of farmers in their negotiations with factories and supper markets.
Many will be surprised that there is such a thing as below cost sale of beef. But it happens regularly. Factories and supermarkets and are regularly pushing down prices, regularly squeezing farmers for ever last cent. The power imbalance within the market regularly pushes farmers into poverty.
This happened recently at a large scale during the beef protests. I travelled the country at the time to meet with the protesting farmers. One Aontú representative, himself a small beef farmer, was threatened with an injunction along with other protesters at the time. I was forced to go to the High Court to defend these farmers. I was selected as a rep by farmers in Meath to represent them.
Now some people say that if you increase the amount of money that is paid out to farmers, that this would push up the price of food at the check out. This is not true. There is enough profit within the food sector to increase the price to farmers and keep checkout prices from rising.
The exploitative nature of the food market is not limited to beef, poultry, pigs, sheep also feel the effects of this. We need to tackle the exploitative nature of the whole food market.
None of this is happening by accident. I was at an Agricultura Committee in the last Dáil making the case for the Aontú Bill which seeks to but a floor under the price of beef at the cost of productions. The then FG Chair said that it was unreasonable for farmers to expect a price above the cost of production. The current Minister for Agriculture agreed with the chair that day, saying that it was unreasonable that farmers would expect a price above the cost of production.
Turn that around for a second imagine if someone asked you to work a 70 hour a week, attend the Dail, develop legislation, meet and represent constituents. Imagine if they asked you to do it for a wage less than the actual cost of doing the work. You would tell that person to get stuffed. No other sector would accept it. The Aontú Bill simply states that a person acting in the course of business shall not purchase beef from a farmer for a price less than the minimum amount for the time being standing prescribed by the Minister by order.
A minimum amount specified by an order under this section shall not be less than the relevant average break-even point most recently published by Teagasc. In determining the minimum amount to be prescribed by an order under this section, the Minister shall also have regard to:
the need to ensure that farming in the beef sector shall be a sustainable means of earning a livelihood for those farmers who are engaged in that occupation;
This Bill is not perfect but it would be a monumental step forward. It would put a floor under farm in incomes and it would increase the welfare and sustainability of farming families. It would be a shot in the arm of rural Ireland and would help in the food security of this country.
