Agricultural production in Ireland and the EU must be viewed in the context of a reformed and evolving Common Agricultural Policy (CAP), with much more competitive EU and world commodity markets. As a result of the reformed CAP farmers can now take advantage of the freedom to farm exclusively for the market. They can focus on meeting the requirements of the consumer in a competitive manner.
The latest price index data from the CSO indicates that overall output prices fell by approximately 15% in 2009. There were declines in the output prices for cattle, milk and pigs of10%, 30% and 9% respectively. There was a marginal increase in the output prices for sheep. This followed increases in output prices across the majority of sectors in 2008. With regards to the prices paid by consumers abroad, these will primarily remain a function of prevailing market and competitive forces in those countries. Eurostat data indicates that there was a 0.9% increase in food prices to consumers across the EU-25 in 2009 following on from the 6.7% increase experienced in 2008.
I have emphasised at EU and national level the necessity for a reasonable balance between granting price reductions to consumers and giving a fair return to suppliers and producers to ensure fair play in trading conditions and sustainability of food supply within the EU. The Commission has issued a Communication on "a better functioning food supply chain in Europe" and I am very pleased that the Spanish Presidency had committed itself to progressing the whole issue.
Among other challenges identified in the Commission communication, it seeks to ‘increase transparency along the food supply chain to encourage competition and improve its resilience to price volatility'. Eurostat is currently developing systems to monitor prices at various stages in the food chain through harnessing available data on price developments in the different steps of the supply chain and comparing price developments for the relevant agricultural commodities, for the relevant food industries as well as for the chosen consumer goods.