Dáil Éireann debate -
Wednesday, 3 Dec 2003

Vol. 576 No. 2

Written Answers. - Producer Returns.

Willie Penrose

Question:

83 Mr. Penrose asked the Minister for Agriculture and Food his views on a recent survey, details supplied, by Agri Aware which found that only 30% of consumers think that farmers are getting a fair price for their produce; and if he will make a statement on the matter. [29208/03]

Bernard Allen

Question:

84 Mr. Allen asked the Minister for Agriculture and Food if his attention has been drawn to a survey by Agri Aware in November 2002; his views on the opinion expressed in the survey that retailers were perceived as benefiting most from the price of food; and if he will make a statement on the matter. [29253/03]

Minister for Agriculture and Food (Mr. Walsh)

I propose to take Questions Nos. 83 and 84 together.

My Department has no direct role in determining the prevailing prices charged for food products in the retail market. In the Single Market food products are traded freely, and Governments do not have the authority to set the levels of mark-up at different stages of processing and sale.

I am aware of the recent report detailing concerns that retailers have been the main beneficiaries of food price increases and that producers have not benefited proportionately. The factors determining producer returns and retail prices are complex. Retail prices are influenced by a number of factors including processing and distribution costs, overheads and exchange rate fluctuations. The strength of sterling has contributed to food price inflation due to the import content in some categories of food products.

The returns to producers only partly consist of market prices and cannot be seen in isolation from the direct support paid to producers under the Common Agriculture Policy. My Department will for example pay some €1.6 billion under EU funded agricultural measures in 2004. This expenditure mainly consists of direct payments to farmers worth on average €13,000 per farmer. The decision to decouple payments will allow farmers to focus more clearly on the demands of the market and of the final consumer. FAPRI Ireland's research forecasts some increase in prices and reduced input costs, which will impact positively on farm incomes.