FDBusiness.com

EU Member States have agreed to a proposal from the European Commission to make €50 million available to Irish beef farmers, which can be matched by national funds to reach a maximum of €100 million. The establishment of the fund reflects the European Commission recognition of the particular challenges facing the Irish beef and veal sector due to market uncertainty and an unprecedented and sustained period of low prices.

This exceptional measure, provided under the Common Market Organisation of the Common Agricultural Policy (CAP), will offer support to the Irish farmers affected. Due to the drop in prices, with a fall in margins estimated at 11 to 19% in the past year for the beef and veal sector, the Irish authorities have calculated that beef farmers have lost just over €100 million.

Agriculture and rural development Commissioner Phil Hogan says: “This fund is a recognition by the European Commission of the particular difficulties experienced by Irish beef farmers arising from significant prices falls and market uncertainty. The money made available by the EU, which may be matched by the Irish government, will protect a fragile but essential agricultural sector. Moreover, it will provide direct support to hard-hit farmers and will ensure the long-term viability of the Irish beef sector. The Commission will continue to monitor closely the overall market situation.”

Once formally adopted by the Commission early in July, the Irish authorities will have until the end of July to design the criteria within a set framework for granting the aid. They must avoid the distortion of competition when distributing it. One of the key objectives should be to ensure the beef and veal sector’s long-term viability through, for example, the development of new markets, the implementation of quality schemes, or the improvement of farmers’ environmental sustainability.

The structure of the beef and veal industry makes it vulnerable, mainly due to its long life-cycle and high costs linked to extensive production. Additional new challenges emerge from concerns over the sector’s contribution to greenhouse gas emissions and a falling domestic consumption.

Ireland’s beef and veal sector is both large and hugely dependent on exports. Five of every six tonnes of beef produced is exported and almost 50% of these exports are to the United Kingdom. Uncertainty around the withdrawal of the United Kingdom is putting downward pressure on prices, deteriorating further the situation of beef producers in Ireland.

The Commission has, over the last four years, been very supportive of a number of sectors which have experienced specific problems, whether arising from the introduction of the Russian ban or particular difficulties in the European animal product sectors in recent years.