Intervention in farmgate prices is a welfare issue, say NI farmers

Farmers in Northern Ireland are pressuring the government to intervene and force food buyers to pay at least the cost of production. 

In a report commissioned by Farmers For Action NI (FFA) and the Northern Ireland Agricultural Producers Association (NIAPA), they argue that intervening in the market is a welfare issue because of the devastating effect of low farmgate prices in the country. 

The farming groups are calling for the Northern Ireland Assembly to force food buyers to pay at least the cost of production with an inflation-linked margin.

The collapse in farmgate prices was causing economic and social misery for farming families and for much of Northern Ireland’s rural society, said the report. 

Intervening in market is welfare issue

William Taylor, FFA NI co-ordinator, dismissed the suggestion that intervening in the market would be impossible because it would be deemed as against consumers’ interests by the competition authorities.

He referenced Scotland’s plan to introduce a minimum price for alcohol which, if it is introduced, will be market intervention for welfare reasons.

“There are good welfare reasons why it could be argued we need intervention by the authorities on farmgate prices and that will carry clout,” he said.

“Hopefully this report will be a wake-up call and we will use this as much as we can on the run-up to the elections.”

See also: SFP makes up 87% of farm income in Northern Ireland

Protecting farmgate prices would be both a practical and effective way of supporting farmers and the rural economy which would help to protect and create jobs, it argued.

It said there were precedents for legislatures to pass laws that helped determine market prices. 

“Many countries, including the UK, impose a system of carbon pricing – a direct interference by government in market mechanisms. The EU imposed a cap on mobile phone roaming charges. 

“Protecting farmgate prices would assist with EU objectives of preserving food security and the sustainability of food production.”

Farmgate prices put farmers into poverty

Nearly 50,000 people in NI work on farms, almost half of them as employees, and jobs will be lost unless market reforms are introduced, said the document.

It highlights sharp falls in farm incomes over recent years, which it says have pushed significant numbers below the poverty line, although no official statistics for 2015 are yet available.

Northern Ireland’s farmers are facing bigger challenges than even their counterparts in the rest of the UK, said the report.

For example, the milk price paid to farmers in NI is significantly lower than elsewhere because a larger proportion of its milk goes into global commodity markets.

“Where the UK has caught the flu, in Northern Ireland this is a bad case of pneumonia.”