Feb 11th, 2010

ICMSA say new beef price grid is "an abject failure"

The President of ICMSA, Jackie Cahill, has said that the new QPS beef grid has failed abjectly and been roundly rejected by farmers right across the country to an extent that means it must be withdrawn. Mr Cahill went on to say that any attempts to 'tweak' the new grid are doomed to fail and that much time and effort will be saved by accepting that it has failed and returning to the drawing board. ICMSA say they have been inundated by complaints from farmers who claim that their margins have disappeared under lower prices being paid for the majority of animals under the new grid. The association said that the new grid has been given a 'trial period' for nearly eight weeks and the farming community has returned a verdict. According to Mr Cahill, "they're not having it; they won't accept it; they feel they are being very hard done by yet again – and they're completely right in all those counts".

Mr Cahill said that "as was usual in Ireland " the people most directly concerned by proposed changes were not consulted adequately, if at all, and what was produced was slipshod and manifestly flawed.

"Following the introduction of the new grid, Irish farmers find themselves in the usual position where we have the most complex and sophisticated grid in Europe and the lowest prices. We only have to look at the British classification system which has half the categories for the grades covered by the grid. The British grid for the U2 to P5 categories consists of 30 boxes – half the number of our grid! That fact alone shows us that the grid was not 'market-led' as we are now being told. The markets didn't demand this grid and we're left with the reality that the grid was designed to cut the prices paid to farmers and to hide and disguise that fact."

Mr Cahill described the new grid as the latest in a long line of changes all resulting in the disadvantage of the farmers.

"The reality here is that farmers have had enough of a these much heralded 'redesigns' and 'reforms' – the quota expansion and dairy deregulation are another example - that have one thing in common: they always leave the farmers with less income than previously. It's never very clear who benefits but it's always painfully obvious who loses and that's the farmer. Farmers selling into factories for the British market are getting 40 cents/kg less than their British counterpart. On an average animal that translates to €140 per head. Farmers have had enough and ICMSA has had enough. The new grid is flawed to a degree that means it cannot and will not ever be accepted by the majority of farmers and the sooner its supporters grasp that fact the sooner we can get down to working on a pricing system that is fair and transparent and will be accepted", he stated.

The ICMSA President rejected the idea that the QPS grid could be rectified by some minor alterations.

"Farmers throughout the country are demanding a change to the grid because they consider it unfair and unworkable. They are not going to be distracted by claims that a bit of tinkering around the edges is going to make a difference. It's not working and it's not going to work. Energies should now go to a fundamental redesign and the restoration of farmer credibility and confidence. The sooner that starts, the sooner the present chaos will end".

Mr Cahill said that ICMSA has already outlined four proposals that he says will move the situation forward and begin to restore farmer confidence in a grid that he states is now widely considered a 'busted flush'.

1.    The current and unworkable 60-box grid should be reduced to no more than a 30-box grid.

2.    The grid should cease the splitting of fat classes as it's not possible to assess these    differences at farm level.

3.    The grid seems to be more about classification than quality. It is an insult to any farmers in the Beef Quality Assurances Scheme to have animals excluded from the quality payment because they are classified in higher fat or lower confirmation boxes. All quality assured cattle should receive a bonus.

4.    Farmers and processors fought jointly to get rid of the 30-month BSE testing. Why re-impose this penalty on farmers? The 30-month age criterion should be dropped. 

Mr Cahill said that Irish farmers produce quality animals and were perfectly aware of market realities. That, he said, was not the issue. The issue was the credibility of the pricing system and the fact that all parties had to have confidence in that system. The new beef grid simply did not enjoy that confidence and it was ICMSA's opinion that it did not deserve it.

"This is going to have to be fundamentally re-designed and certain parties are going to have to stop trying to pretend otherwise. Farmers will not be fooled and the boom in calf exports already shows what they think about suggestions that the existing grid can be 'tweaked' into one that will enjoy their confidence. That's not going to happen and the sensible and fair thing to do is for the supporters of this discredited system to just accept that they got it wrong and sit down again with the relevant parties and get it right this time."

The ICMSA President said that it would be a very big mistake for supporters of the new grid to suppose that farmers will eventually just accept the lower prices and keep supplying at a loss. "This hasn't been thought through either. The factories will see a huge drop in throughput and what they'll make by cutting farmer prices initially will disappear very quickly as the 24-month supply fails to materialise", he concluded.

Ends    11 February 2010.

Jackie Cahill, 087-2820663

President, ICMSA.

Or

Cathal MacCarthy, 087-6168758

ICMSA Press office

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