'Real cost of producing food must be paid by everyone' - McCormack

Politicians and policymakers are being urged to "pay attention" to a debate underway in France where farmers are in crunch talks with food giants over production costs versus food prices.

As part of the negotiations it is understood that a new law that may "force" shoppers to take account of agri-food production costs has been proposed during the course of negotiations between the sides.

Highlighting the momentum-building scenario, Pat McCormack ICMSA president said the objective of the proposed French legislation is to "legally ensure" that farmers and primary producers receive "a fair price" from corporate retailers "who completely dominate" the EU’s food sector.

The dairy farmer said in France there is "a general acceptance" that the survival of a state’s farming and food sector is "more important" that any corporation’s desire to increase margins and build market share.

“A slow-but-steady momentum is building behind the idea of margin reform by regulation. Without such reform the contradiction between a continuing ‘cheap food’ strategy and the lower volumes involved in the transition to low emissions farming will render environmental moves futile.

"We have repeatedly pointed out that any meaningful action to lower emissions will have to involve the end of the ‘cheap food’ policy introduced and operated by the corporate retailers for the last 30-odd years.

"It is that policy that prioritises volumes over margin and leaves farmers having to produce more as corporate retailers relentlessly drive down prices paid by the consumers - while keeping their own retail margin.

"Everyone behind them in the supply-chain simply passes the reductions back to the farmers who have borne the cost of this very deliberate strategy for decades now.”

Noting that the proposed French law as explained by Gregory Besson-Moreau to the EU’s Parliaments’ Agriculture Committee would be a system of ‘reviewed and updated cost indicators’, the farm president said that "we simply have to make the connection between the costs of producing something and the price people are asked to pay for it”.

“We have been repeating this mantra since the Government put the green agenda front and centre. There is a real cost of producing food and that real cost - comprised of economic and environmental elements – is going to go up and will have to be paid for by everyone - including the retailer and consumer.

"We have had a situation for the last 30 years where the consumers paid an artificially low price with the balance of the real cost paid by the farmer primary-producer.

"The system is brutally unfair and hundreds of thousands of EU farmers have seen their livelihoods sacrificed on the altar of this ‘cheap food’ policy," he said.

Consumers driven by price

Earlier this year, the Farming Independent spoke to National Dairy Council chief executive Zoe Kavanagh about its latest consumer insights on the key drivers that influence shoppers to purchase one product over another – and whether there is any evidence to suggest that consumers are willing to pay higher food prices for the hefty environmental regulations being heaped on the farmers that ultimately stock the shelves and counters.

Having tracked trends via annual consumer sentiment surveys – and most recently during the Covid-19 lockdown – the NDC boss explained that while the majority of consumers “want action” on climate change, price and nutritional issues still outweigh climate concerns for purchasing food – with the carbon footprint of food only an issue for one in 10 consumers.

Ms Kavanagh said: “As it stands, when the consumer walks into a shop to purchase food in general the key driver is price – 46pc say ‘price is the key driver’; while 34pc say ‘nutrition and health is the driver’.

“Only 28pc say ‘provenance is a driver’ and actually just 10pc say they think about carbon footprint.

“When you look at that you say ‘gosh, farmers are doing all this work to become more sustainable, yet the consumer has no idea what they are doing’.

“And then, even if they do know more about the production system, the question becomes ‘will it motivate the consumer to purchase a particular type of product?”

However, Ms Kavanagh says this is “not a reason for farmers to panic”, as she says that consumers still believe Irish dairy production is a “superior” product.

“88pc of consumers believe that Irish dairy production ‘is superior’ to anywhere else in the world because it is based off grass.

“But at the same time, 75pc of consumers say they have ‘no idea’ what the Irish dairy production sector is doing to ensure it is sustainable in the longer term.

“That means there is a really significant knowledge gap at consumer level around what the Irish dairy sector is doing to be sustainable in the longer term.”

“So, we are going to spend the next four years reassuring that ‘questioning consumer’ around the dairy production system,” she said.

Online Editors