Skip to main content
Normal View

Farm Prices.

Dáil Éireann Debate, Tuesday - 29 June 2004

Tuesday, 29 June 2004

Questions (122)

Martin Ferris

Question:

120 Mr. Ferris asked the Minister for Agriculture and Food if a report has been compiled on the impact which the increasing grocery market share of large supermarkets and retailers has had on farm prices; and if he will carry out an investigation into this phenomenon. [19389/04]

View answer

Written answers

Various reports have been compiled on the factors influencing farm prices. A report by Agri-Aware detailed concerns that retailers had been the main beneficiaries of food price increases and that producers had not benefited proportionately. A report commissioned by RGDATA, IBEC and the grocery wholesalers organisation IADT found that the main influences on increasing food prices, albeit at less than the rate of inflation, were processing and distribution costs, overheads and exchange rate fluctuations rather than prices at farm gate. Other reports have compared farm gate prices with retail prices on a gross basis without analysing processing, marketing and distribution costs. The product which leaves the farm gate is usually transformed before it appears on the retail shelf. Continuous change in consumer demand has driven the increase in ready to go meals, prepared foods and a range of end products, which is far more extensive than that available 20 yearsago.

The vast bulk of the food we produce is exported and returns from export markets have a greater impact on farm prices and producer returns than the retail structure of the domestic market. Producer returns also only partly consist of market prices and cannot be seen in isolation from the direct supports under the Common Agriculture Policy. My Department will, for example, pay €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.

My Department does not have any direct role in determining the prevailing prices charged for food products on the retail market. In a 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.

Top
Share