Recent weeks have seen thousands of beef farmers join protests at meat processing plants across the Twenty-Six Counties. Many of these protests are in defiance of High Court injunctions that were secured by the owners of the meat plants - a scenario that could well see protesters jailed in the near future. Yesterday (Sept 2nd) saw scuffles between farmers and Gardaí at a protest in Cavan. So what’s driving these escalating protests?
The simple answer to this question is price - with the farmers asserting that the prices being paid by the meat plants are too low to cover the costs that they have incurred in rearing their cattle. Without significant and sustained price increases many farmers claim they will soon be forced out of the beef production business completely.
The spread and intensity of the factory-gate protests speak to decades of simmering anger in the farming community - anger that is directed at hugely profitable supermarket chains as well as the meat factory owners. With considerable justification the farmers believe that the food processors and supermarket chains are creaming off the lion’s share of the profit that are generated from food production in Ireland.
While the current dispute may well be temporarily resolved with a marginal increase in prices and other minor concessions, the underlying structural problems within Irish farming will remain.
Tesco operates over 200 stores on the island of Ireland. The company refuses to give a stand-alone figure for profits generated in Ireland, but in 2018 - 2019 it had a turnover of almost €2.6bn in the Twenty-Six Counties alone.
These structural problems flow from a right-wing ideology that deems farming and food production to be a private business like any other. All aspects of food production are to be held in private hands for the purpose of generating maximum profit and prices are to be determined by a theoretical law of supply and demand. The human, environmental and economic consequences of this ‘law’ are minimised or ignored completely.
The political establishment that enforces this right-wing ideological approach to farming and food production ignore the lessons of history. The exact same blind belief in the ‘free market’ contributed to deaths of up to one million Irish people in the 1840s. While the nature of the challenges facing farming and food production have changed dramatically since then, the ‘free market’ approach has not. And with it come inherent inefficiencies and very real risks.
Prior to the industrial revolution almost all Irish wealth flowed from the land, either directly in terms of food production, or indirectly through the renting of land to tenant farmers. Control of Ireland’s highly productive agricultural land was a major motivating factor in the British invasion and colonisation of Ireland. With that colonisation came a new system of private land ownership that eventually concentrated land ownership into the hands of an ever smaller number of, often absentee, landlords.
The land reform that began in the late 19th century saw land re-distributed to tens of thousands of individual farmers, but the underlying principles of private ownership, private rental, private profit and the dominance of the ‘free market’ remained in place.
While farming no longer dominates the Irish economy, it remains a hugely important sector, most especially for rural Ireland. The all-Ireland agri-food sector has a turnover of about €35,000,000,000 (€35bn) per year and employs about 350,000 people.
All of this wealth ultimately flows from the land, making it the most valuable of Ireland’s natural resources. The combined wealth that flows from Ireland’s other natural resources - hydrocarbons, fisheries, forestry, renewable energies and mineral reserves - makes up only a small fraction of the wealth generated by the agri-food sector.
Unlike the Corrib Gas Field or even Tara Mines, there has been little recent national discussion about who owns Ireland’s land and more importantly who benefits from the wealth that accrues directly or indirectly from it. Such a national discussion is long overdue about a renewable resource that could continue to generate vast wealth for millennia to come if properly managed.
The Corrib Gas Field was handed to private energy companies by a corrupt political establishment. The same establishment have overseen the creation an agri-food system that is generating billions of euros in profit for private corporations, often at great cost to farmers and rural communities.
The meat-plant protests have highlighted the fact that those who own the land do not necessarily benefit from the great wealth that is generated from it. This is a relatively recent phenomenon which challenges the notion that ownership of a wealth-producing resource automatically leads to ownership of the wealth that it produces.
The reality of farming in 2019 has reduced many farmers to a subsistence level to produce animals and crops for sale to a handful of processors and supermarkets. The fact that these buyers act as a de facto cartel to kill meaningful competition leaves the farmers without the option of selling to a competing buyer.
Cattle, sheep, pig, milk and crops can’t be put on a shelf like other products until prices improve. Farmers have to chose between selling to the food processors or incurring even greater costs to sell to the same processor at a later date - a fact that allows the food processors and supermarkets to squeeze the farming community on a daily basis.
Smaller farmers are particularly hard pushed, often relying on off-farm income to pay for animal feed, veterinary and other essentials. Instead of operating as viable stand-alone businesses, many farms are effectively shackled to the prices and whim of private corporations. The parallels with a darker period in our history are stark.
The land reform of the late 19th and early 20th century was designed to provide tens of thousands of Irish families with security of tenure and a permanent income. It was also hoped that it would create a sustainable model for viable agriculturally-centred rural communities. While imperfect, it represented a major advance on the landlord-based system it replaced.
The land wars of the late 19th century were fought to end the rule of the absentee landlord. Today privately owned food processors and supermarket chains are generating super-profits from Ireland’s land at the expense of those farm it.
Now food processors like The Kerry Group, Glanbia, APB and Dawn Meats as well as supermarket chains like Tesco, Supervalu and Dunnes Stores operate multi-billion euro businesses that are exclusively, or primarily, based on the produce of Irish farms. Like the landlords of a bygone era they have found a way to access the wealth of the land at the expense of others.
To add salt to the injury these companies seek to minimise the tax that they pay - taxes which should be used to build critical infrastructure, support rural communities and provide essential public services such as healthcare, education and housing.
In 2012 Larry Goodman’s ABP Group paid just €165,00 tax on profits of over €80m using tax avoidance schemes in Luxembourg and Holland. In 2014 Glanbia paid just €200,000 tax on a profit of €40m, after transferring assets worth €1.3bn to Luxembourg. Even companies that don’t use elaborate tax avoidance schemes benefit from the Twenty-Six Counties criminally low corporation tax regime.
A business model that sees farmers operating at a loss to feed the profits of a handful of massive corporations is clearly unsustainable. Change is needed.
The reality of family farms operating at a loss and of rural communities being incrementally stripped of vital services like shops, post offices, banks, schools and local employment is equally unsustainable. Change is needed.
And in the context of climate change and environmental crisis, the current model of farming is also unsustainable. Change is needed.
The challenges facing farmers, rural Ireland and the wider country over the coming decades are significant but not insurmountable. New thinking beyond a blind belief in the ‘free market’ and private corporations will be needed to overcome those challenges.
A new environmentally and socially sustainable model of farming and rural development is needed - a model that ensures that farmers, rural communities and the nation at large all benefit from the wealth that is generated from Ireland’s greatest natural resource.