Government intervention isn’t the answer

June 22, 2009

Thousands of farmers from the European Union’s 27 member states are taking to the streets of Luxembourg today to demonstrate against poor returns.

“Food production is the single biggest economic activity in Europe and it is facing serious problems,” said the organisation’s secretary general Pekka Pesonen. “Dairy in particular is in a very severe crisis, and other sectors, from pig meat and olive oil to sheep and goats are suffering, too.

“Even as the causes of the problems differ, the result is always the same – we are not getting a fair share of the value of the final product.”

Producers all over the world could no doubt say the same thing but those of us who’re in the real world know that’s mostly to do with the market and very little to do with the government.

The crisis affecting the dairy sector is likely to be a major focus of attention. Despite a decision by the EU dairy management committee this week to raise export refunds for milk powders, Irish Farmers’ Association leader Padraig Walshe called for a “much more aggressive approach”.

“Prices have fallen to their lowest level in recent history, in some countries to those of 1983. To make matters worse, production costs have remained at an all-time high. This is disastrous for farm incomes, endangering the very existence of dairy production in the EU.”

A taste of the protest to come next week was given in Brussels on Thursday (18 June), when hundred of farmers from Germany, France, Belgium and Holland drove their tractors to the city centre as EU heads of state met for a summit meeting. . .

Their principle demand was for an immediate 5% quota cut, to tighten the market and allow cost covering prices to be achieved. But the EU Commission says production is already well below quota and such a cut would make no difference.

A 5% quota cut to tighten the market means a forced reduction in supply to force prices up so consumers pay more. That’s not a subsidy from the taxpayer but from the consumer which amounts to the same thing in the end.

Farming in Europe is facing a crisis. But if government intervention in the market by way of subsidies and quota controls is the answer they are asking the wrong question.


Dioxin in Irish beef

December 10, 2008

Cattle in three of 11 Irish beef herds tested have been found to have higher than recommended levels of dioxin but the meat won’t be recalled because the levels don’t constitute a health risk.

Some 34 herds are still being examined and any cattle shown to be above the legal limit will be taken out of the food chain and the EU commission informed, the Irish government said.

The government recalled all Irish pork products Dec. 7 after tests confirmed 10 percent of Ireland’s estimated 1.47 million pigs may have been exposed to feed containing dioxins, associated with cancer. The recall leaves Irish pork producers facing a 100 million-euro ($128.5 million) bill.

Sky News  reports the meat was contanimated after unlicensed oil used in a burner tainted bread crumbs which were sold to farms.

Padraig Walshe, president of the Irish Farmers’ Association (IFA), has stood up for farms and pointed the finger at other links in the chain.

“Absolutely no traceability has fallen down at farm level,” Mr Walshe said. “Any problem with traceability has been before with feed going to farm or the process afterwards.

“It’s very disappointing if other procedures weren’t put in place in other parts of the food chain.”

Consumers are becoming more wary over what goes in to their food and while there is absolutely no room for complacency this gives meat and milk from New Zealand’s pasture-grazed stock an advantage over those raised on feed lots.


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