More support needed as erosion of farm margins continues – Cullinan

IFA President Tim Cullinan has said that for the ninth month in succession, on-farm margins continue to slide as rising input prices overshadow any growth in aggregate output prices.

Data published by the CSO shows aggregate input prices in September rose 36.9 per cent year-on-year, with aggregate output prices rising 29.2 per cent over the corresponding period.

“Relatively strong output prices have helped somewhat in mitigating against the input price rise, but worryingly aggregate prices in our most vulnerable sectors are under pressure and below what the market might be expected to deliver,” he said.

“Cattle prices are back 1.9 per cent on August levels, and sheep back 2.7 per cent. These are traditionally low-income sectors and need support. Many simply won’t have the capacity to continue operations at existing input/output prices”.

Mr. Cullinan said that while the Government has provided some targeted interventions in Budget 2023, more will be needed in coming months.

He added that IFA has offered workable solutions to the Department including a bridging payment to farmers who were unsuccessful in Tranche 1 of ACRES or an upfront payment for Tranche 2.

“It needs Government action and support, because there appears to be limited direct interventions against the rising input cost crisis coming from the EU in the short-term,” he said.

The IFA President was highly critical of the EU Commission’s recent ‘Communication on Fertiliser’, which he said “appeared more interested in protecting the EU fertiliser industry than the farmer.

“It offered nothing to alleviate current price pressures, even rejecting proposals to suspend anti-dumping tariffs on fertiliser imported from the USA and Trinidad and Tobago which IFA and colleagues in Copa-Cogeca have lobbied hard for,” he said.

“In effect, the EU strategy puts greater emphasis on individual member states to support primary agricultural producers for fertiliser purchases via the Temporary Crisis Framework, which was extended to end December 2023 and the state-aid threshold increased to €250,000 in recent weeks.

“EU natural gas prices, while still well above past ‘normal’ levels, have fallen significantly from their summer peak, now hovering around €105/MWh. This has seen the resumption and an increase in production capacity across many EU fertiliser plants which will help ensure increased supplies at lower costs into the future.

“Given the phenomenal inflationary input price endured by farmers, this reduction in production costs must be passed onto farmers immediately so they can secure supplies for the coming Spring and help preserve soil fertility and crop growth,” he concluded.