Ciarn Fitzgerald: Focus on food prices is mere populism – Agriland

The current focus on food prices seems to be more about populism than real concern about long-term trends, while Irish agricultures move forward on lower carbon output does not seem to be recognised.

There has been a lot of heat but very little light generated in political and media circles around food prices in recent weeks.

Despite all of the noise, over the last three years in particular, around the new paradigm imperative of sustainable food productionand carbon budgets, the reality ofthe stunt that is dominant retailer pricing (masquerading as everyday low pricing), trumps everything still.

The point here is that the continuing ability to get suppliers to fund price falls and the body politic to fall over itself in calling for more, through loss leading by retailers, is still the core issue.Consumer Price COICOP Division Indices March 2023. Source: CSO Ireland

The chart above from the Central Statistics Office (CSO) shows the rate of price inflation across all sectors of the Irish economy on a 12-month basis, compared to base years of 2016 and 2011 capturing both long- and short-term impacts.

So all these calls for the government to do something now about food prices is moot.

The reality over the longer term is thatfresh food in grocery retail saw almost no price increasebetween 2011 and 2021 and only in 2022/2023 has there been some price inflation.

Clearly, governments must be attuned to the availability of affordable food butgovernments must also be on top of ensuring continuity of sustainable food supply (particularly ones involving Green Parties).

In that sense, even before the onslaught of food woke-ism by our environment friends, the fundamental understanding of the dynamics offood production supply and demand had unfortunately been very much dumbed down over last 20 years.

In essence, the farmer and the food processor were offered up to the food retailer / discounter as part of a Faustian pact that promised everydaylow food prices and was totally agnostic about either the economic or environmental sustainability of local food production and supply.Agri-food economist and former chair of Meat Industry Ireland, Ciaran Fitzgerald

This agnosticism ignored the reality whereby increased production costsand regulatory constraints are completely at odds witheveryday low pricing of fresh produce or Known Value Items (KVIs), and inevitably means a long-term fall-off in local supply capability.

This disconnect has meant that local production of fruit and fresh vegetables in particular,has diminished because of the cost price squeeze, to be replaced by imports from lower costregions.

The Irish meat and dairy sectors only dodged abullet firstly because the industries have world-class marketing capability.

They dodged anotherbullet when the DOHA Development Round of the World Trade Organization, which would have given up large segments of the EU beef and dairy markets, collapsed in 2008.

The sectors are also being sustained byincreasing global demand for low carbongrass-based meat and dairy.

Nevertheless, the continuing systemic absence of joined-up thinking means a long-term disconnect between aspirations for sustainable food demand and the sustainability of local food production.

The current circus around food prices will move on and unfortunately the chance of a deeper dive into the reality of retail food pricing with it.

Meanwhile, the concern following the recent interview by Agriland with the head of Environmental Protection Agency (EPA) is thatnot only is the old dominant buyer trope still in place, but the current realities of Irish agricultureshowingsignificant changes in introducing emissions-loweringproduction methods are not recognised.

The view expressed by the EPA seems to be stuck in a 2019 time warp.

It doesnt reflect the adoption of the Marginal Abatement Cost Curve (MACC) emissions-reducing practices, the 20% reduction in fertiliser usage in 2022, the stabilising and reduction in the national herd (CSO data, Dec 2022) and the reality that the expansion phase in dairy has plateaued.

Real progress in adopting emissions-reducing practices in Irish agriculture has been made and more is needed and will follow.

By the way, Irish agriculture is way ahead of most other sectors of the Irish economy where the low carbon journey has not even started.

This real progress is verified on a daily basis by global customers and consumers who want more and more of Irelands low carbon output.

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Ciarn Fitzgerald: Focus on food prices is mere populism - Agriland