High noon for farmers as Brussels gets ready for cuts

It takes 20 years to break a farmer, goes an old saying

It takes 20 years to break a farmer, goes an old saying. So despite intimations of apocalypse now, Ger Bergin won't be throwing in the towel for a while yet. "I won't go along with those who say we'll all be out on the side of the road. We won't. What is happening though is that farmers are living off their assets. You sell cattle but you don't replace them. Your tractor could be just about chugging along but you won't buy a new one. You sell sites if possible. You can do a lot of things but that can only go on for so long."

Ger Bergin is a bright, well-read, articulate 34-year-old who could have been anything he wanted to be. He had his sights on a French and marketing course after school until circumstances took him on to agricultural college and back to the family's 170-acre mixed farm at Ballacolla, Co Laois, where he lives very modestly with his mother and brother.

He understands the global economy and how it trickles down, is well able to compare farming policy in half-a-dozen countries, and French terms such as degressivite roll off his tongue. Above all, he has a realist's view of agricultural history: "Farming has always been cyclical. At the end of the day, there will always be fewer farmers. It happens as economies become more industrialised . . . " But he says he doesn't understand why good, efficient farmers such as he should go along with policies which require him to continue producing good food below cost, where the consumer benefits not at all and where the supermarkets are the only winners. If farmers are being driven out of business by low prices and consumers are still paying through the nose for farm produce, doesn't it make sense to wonder why, he asks. Doesn't the consumer want to know why he or she pays £1.19 for a collar of bacon when the producer gets just 35p, or 29 per cent of that?

"Last summer," he says, "there was a short inflation scare. What caused it? Increased consumer prices for pork and poultry, we were told. But for the farmer at the very same time, prices had dropped by 24 per cent for pigs and 4 per cent for poultry. The whole idea of the MacSharry CAP reforms was that consumer prices would drop by about 25-30 per cent. It hasn't worked.

READ MORE

"The prices have not been passed back. Supermarkets will maintain their margins no matter what. That's a perfect example of it."

Mixed farmers like Ger Bergin learn to live with recurring cycles. If beef is collapsing, then sheep may be buoyant or a good summer might boost grain yields. The problem is - certainly from a public relations perspective - that unlike say, tyre manufacturing, agriculture is not a single industry. It covers areas which are major industries in their own right, such as beef, milk, grain, sheep, pork, all involving different production systems, seasonal factors, marketing strategies, EU policies, premiums, quotas and qualifications of a million confusing kinds. The problem then is that if specialists such as pig producers - an industry that everybody agrees is in desperate straits - are demanding better prices, it appears as if all farmers are up in arms. Likewise if there's a BSE scare, in which high yield beef markets such as Britain and France defy the EU and effectively boycott Irish beef. Or if EU sheep policy severely disadvantages lowland sheep farmers - as is currently the case.

But like many complex issues, it is a lot simpler to lump them all together and conclude that farmers are always whinging.

For all of them, in one way or another, Brussels is boss. "It's not a free market. It's a political market, managed by 15 ministers sitting round a table in Brussels," says Ger Bergin. But he's not looking for a free market either. "Free market agriculture has never worked. They have it in New Zealand - but lads with 100 cows are entitled to social welfare . . . There is no element of Irish life that is not subsidised. What does it cost the IDA to create a job? I'm not complaining - just making the point."

But there is a culling in progress and back in the Irish farmyard they know it's high noon. The proposed cuts - ostensibly to increase consumption - are designed to get rid of farmers, they say. "I believe that's the real aim," says Bergin. "Commissioner Fischler comes from Austria, a beautiful country with 100 million people living within four or five hours' drive of it. They could easily survive on high quality tourism there. The problem is that he has superimposed that vision on us and it's not going to work. We are a small island on the margins of Europe. Agriculture is 10 times more important to us than to any other EU country. Thirty per cent of Ireland's net foreign earnings and 340,000 jobs are dependent on farming and food. We are the exporting nation of Europe. The others can consume what they produce."

Meanwhile, the agonising transition continues. Farmers have learned to negotiate the labyrinthine regulations governing each industry, straining to keep up with EU policy and market forecasts, striving to anticipate when to get out of sheep and into grain, or out of store beef and into weanlings, or out of barley and into rapeseed. The problem is that the die is often cast years hence. "Beef animals for the next three years are either walking around now," Bergin says, "or are inside animals as embryos or are being born. And you can't just turn off milk from a cow . . . "

He was managing fine up to 1996. Through hard work, reinvestment of revenue earned in the good years and borrowings, he brought ewe numbers up to 450; built up the suckler herd from 40 to 70; cultivated grain, reserving some for farm feed. The MacSharry CAP reform cuts were factored into his farm plan. Beef markets to Europe, and live trade to Libya and Egypt were healthy; for 21/2 years, no Irish beef had needed intervention storage. Then on March 26th, 1996, the British Minister for Agriculture rose in the House of Commons and made the link between beef and CJD. Beef that had been fetching around £1 a lb. plunged to 78p. Intervention reopened and prices settled at around 82p a lb. For him, the 20 per cent drop was partially offset by reasonable sheep prices and good grain yields making about £130 a tonne.

But it was a blow; beef had provided 40 per cent of his income. At current prices and including direct payments, he is losing around £50 a head. The MacSharry cuts have begun to kick in: last year, grain was at £82 a tonne. The EU calculation of lowland sheep premiums allied to flat prices have knocked the value out of that sector. And when the rain came down and stayed for 18 months, this alone - excluding extra labour - cost him roughly £10,000 in extra feed, fertiliser, animals failing to thrive, and such imponderables as machinery burning up more diesel to travel across slushy land.

Meanwhile, the proposed cuts would knock about £4,000-£5,000 off his current income; approximately a third of his total earnings. Current EU lowland sheep policy is forcing him out of sheep - an area, he points out, where even the domestic market is under-supplied. In beef, the effect of price drops has been that his hard-won move from 40 to 70 sucklers has left him "running faster to stand still" and he will simply downgrade his operation.

To add insult to injury, the Commission's proposed 30 per cent beef cut, supposed to be for the consumer's benefit, will simply be absorbed by the supermarkets - that's the experience, he shrugs.

Overall, the cuts will simply nudge demoralised farmers into low input-low output strategies, which will in turn seep into all other areas of agri-business, he says. In Laois alone, the IFA reckons that though the loss to farmers would be £7 million, the loss to the local economy would be £17 million.

And regardless of public perceptions, the Ger Bergins are not looking for spanking new four-wheel drives or a television in every milking parlour. "I just don't want to stay producing below cost. Farmers would give their eye teeth for a fair price that reflects the cost of production. What do we earn? Well, you have to aim at the average industrial wage - £15,000, but the average farm income is somewhere around £8,000. The younger ones will just get out of the sector. The agricultural colleges can't fill their courses.

"But Irish society has a decision to make. We can't all live in Dublin. After the Celtic Tiger has gone, the land will still be there. People will still have to be fed. Do we want rural farm families, making a viable contribution to the local economy? Or do we want rancher-style farming and factory feed-lots producing our food? That's something all of society has to think about - not just the farmers."