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A soils-first food and farming policy

Food production must account for climate-change and GHG’s, provide good nutrition, ever-improve animal welfare, minimize pollution, enhance biodiversity, reward farmers and rural communities, and, too rarely mentioned, restore and maintain soil health and fertility. But it is only through the latter that we can link everything else together to create a truly sustainable food system.

If there is a universal panacea for our food systems, it lies within the way we now go about restoring the health and productivity of our soils. By saying such one could however be guilty, as is often the case, of allowing a single issue to dominate, whereas identifying a sustainable food system, differing as they must region by region, is a complex process that requires the joining of numerous dots across a broad canvas. Focus on one issue alone and consequences happen elsewhere. Nonetheless, as one looks at soil regeneration, the solutions for many of our other problems emerge.

Click on the link below to read more [downloadable pdf]

A soils-focused food and farming policy

The paper was first published on the http://www.ARC2020.eu website.

 

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When Agri-Food does not mean Farming & Food

This post first appeared online at http://www.thatsfarming.com in February 2018

Too often, in our days of long supply-chains and dominant trading positions held by those active outside the farm-gate, the return linkages are forgotten.

Agri-food is a much-used word in Ireland. It is one that I have been using for years to highlight the connection between farming and food. In my formative years, studying and teaching at Wye College, the University of London, the farming industry was at a point where those in the know were telling us that farmers needed to become much more market aware. It was about becoming market led as opposed to supply driven; the years of the latter were over, and farmers needed to know about consumer demands and to produce the food for specific consumer-product markets.

When I started my blog about whatever I was researching at the time relating to Irish farming and food, I felt that ‘agri-food’ was an appropriate term. It acquired the tail, ‘solutions’ because I never like to be in a position where I cannot find a positive way forwards, regardless of how difficult the problem may be. Hence, my blog became ‘Agri-food Solutions’.

Nonetheless, as I became to fully appreciate that ‘agri-food’ in Ireland very much relates to the workings of the ‘agri-food’ industrial complex that operates beyond the farm-gate, I rather regretted having chosen the term. Frankly, agri-food solely relates to the processors and exporters of foods. And they often treat farm produce as little more than raw materials, albeit they require that they are quality-assured. It sometimes also uses to import raw materials to create, often innovative, food products. Rarely, however, are the products based upon specific farming practices that can generate a premium price for the farmer. Sadly, it appears that ‘agri-food’ is more about the generation of profits and rewards within the supply chain than enhancing the farm-gate price.

Too often, my own feedback suggests that far from the supply-chains being built on close partnerships with farmers, they operate with antagonistic relationships. At best, it is not a positive position, at worst it is dysfunctional state of affairs. Simply, one wonders how Ireland’s small-scale, family-owned farms can create a promising future for themselves when such exists. It is a position that must change; a common enough theme within my own writings.

From farm-to-fork

We are accustomed to the phrase ‘from farm to fork’; it is about consumers and those within the food chain knowing where food comes from. It is an interest and concern that will not dwindle over time. The farmer, the primary link in the chain, has increasingly been required to assure the consumer, the retailer and the processor, that all is in order. It is verified so. Our food is traceable from field to consumer. Due diligence has been completed. And Ireland has been highly successful at implementing such national assurance schemes. But has all this certification created a system that works for all? Have we created an end-to-end supply-chain rather than a functioning circle?

Too often, in our days of long supply-chains and dominant trading positions held by those active outside the farm-gate, the return linkages are forgotten. The circle is not complete, so the rewards do not find their way back to the farmer. Frequently they are excluded from the value-added within the chain. Regularly the system precludes them from adding value to their own produce. And at times, and importantly, the consumer to farmer, market-research loop fails to function. Localization of our food systems will help, but at all levels, we need to close the circle. We must think ‘from farm to fork to farmer’; it is the key to the future viability of ‘family farming’ where ever it is found.

I, therefore, started 2018 with a ‘rebadging’ of my own Blog. The original Agrifood Solutions blog, with its 100 posts and access to half-a-million words of my writings, is still online here, but I have now decided to adopt a title that more clearly represents my own position. Thus ‘Farm to fork to farmer’ now presents my musings about how to close the circle and, thus, to improve the farmer’s lot. It also archives my published articles. It can be accessed here.

Does the European Union need more milk?

The following article was published by ARC2020 in March 2018

If one lives in Ireland and commentates on agriculture, a day does not pass without reading about the expansion of Irish dairying. Since the end of the milk quota regime, production growth has been rapid. One would have expected the low prices of 2015 and 2016 to have cooled the ardour, but apparently not. Add in that the Commission had to intervention stockpile milk powder and that much of Irish expansion milk has been dried, one would have expected market signals to have dulled enthusiasm. But no, we hear talk of moving onwards to 10 billion litres very soon. After all, the World population will grow and Africa or China or somebody will buy Irish dairy produce.

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Milking the Farmer – from Ireland to Romania

The following article was published by ARC2020 in February 2018

During the first decade of this Millennium I spent much time planning and analysing integrated milk production and processing investments. Faced with the twin demands of investors and EU grant applications, the models developed were highly complex. As I was working in Romania, they had to be bilingual. More recently, living in Ireland, I have been appraising Irish dairy farming. This has given me an interesting insight into two dairy industries in very different climates and at different stages of development; be it farming, processing or marketing wise. Surprisingly there is the odd similarity.

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MEAT FACTORIES – A PART OF THE PROBLEM OR AN EXCUSE

WHAT ARE THE MEAT FACTORIES PROFIT MARGINS?

Ever since I started investigating the beef sector I started hearing complaints about the meat factories. Typically, they were about profits being made at the farmers expense. I have, of course, done my own research and evaluation but it has been unpublishable as it relied too little solid evidence. It was good to read this week in the farming press an attempt to assess what is really happening; albeit it has come rather late in the day. Further factual based disclosures in Ireland will, at least, reduce the need to speculate by ‘extrapolating’ from British and Northern Irish information.

Personally, I suspect that the profit margins per head of the factories are low. Maybe they are two to three percent of sales turnover. Is that excessive? It could be that it is the cloak of secrecy created by unveiled accounts that is the root cause of suspicion. Are those private entities who control the factories their own worst enemies when it comes to the poor public relations that emanates from a lack of transparency? It is probable that eventual disclosure, when it happens, will lay to rest some of the hoary old chestnuts that circulate in the beef industry, to the benefit of everyone.

My conclusion has long been that the Irish factories operate a high-volume/low margin model. They need supply to make it work. I once knew someone whose business was exporting lambs; he made only $1 per head but traded 500,000 a year. He was happy and wealthy. He could see little reason to seek more for what he sold so he could pay more for what he bought. His high-volume/low margin model worked for him. So, if your business generates the profits that you need for your own needs, why change it? It is quite plausible that such is the state of play in the Irish meat processing sector; protect your margin and keep the throughput-volume flowing.

CAN SUPPLY-CHAIN MARGINS BE PASSED ON TO FARMERS?

If it transpires that the processing profit margin on cattle is €50/head or less; is it realistic for beef producers to expect a part of this to be passed onto the farmer? Any profit proportion passed on would pale in comparison with, for example, a €200/head support payment for suckler cows.

A similar point can be raised by comparing retail prices with farm-gate prices, albeit using data from the AHDB in the UK. For the reported years of 2014 to 2016, the average farm-gate price was around 49% of the retail price of beef. I suspect that if one asks around the wider food industry, that is high. It compares to 35-40% for pig meat. Again, it begs the question, how much profit margin is there existing within the supply-chain to pass back to the farmer?

One can argue that retailers are keeping retail prices low and using beef as a loss leader, thus squeezing everyone further down the chain. Of course, the same can be said for, say, milk. More likely it is a consequence of the food retailing model that has evolved over the last thirty years. Food is very cheap in terms of total household expenditure. Food retailing is under pressure, competitive and returns to shareholders are not what they were. It will be a brave retailer who will start to price basic foods higher in a competitive market place where consumer loyalty has long since gone.

AGAIN, IT COMES BACK TO SELLING A PREMIUM PRODUCT

To come full circle, how are beef farmers to gain a greater reward for what they sell? It is comforting to accept the idea that we are all just little guys being squashed by the big players. It is easy to accept the idea that beef and, especially, suckler beef is a low-margin business; and as such it must be supported by the tax payer; for which we can conjure up endless justifications.

The alternative is to focus upon quality products, more so when they emanate from the suckler herd, and getting that product into the market place in a way that the consumer can reward the farmer for the quality. Not forgetting that for some consumers quality is about much more than the taste and texture of what is on their dinner plate. For the greater part it will have to be the factories that deliver for beef farmers, as awkward as that may be given that all cattle entering the factory gate are not equal. It is the factories who maintain the baseline Irish beef standard.

I would argue that the beef factories’ margins, or even the wider supply-chain margins, are not as large a problem as they are often given out to be. The factories could be a problem if they choose to abuse their market position by stopping others entering the business to create new route-to-market options. If they operate volume-focused business models, they should not try to inhibit others providing a low-volume service to farmers wishing to develop niche markets.

Supporting the creation of route-to-market options is where the European Commission and Irish Government must be proactive. It will probably have to happen through farmer-controlled producer groups, as small as they may be in the beginning. Farmers need these options if the present processing system is unable to provide them with the services they need. And this is not just an Irish problem, it is one that is also cited in the UK farming press as holding back the development of premium British beef products. The survival of both the Irish and British premium-beef producer needs these options and it is imperative that the powers-that-be ensure that they are there.

Hence, we can worry all we like about the profits made by meat factories but, in all likelihood, we will find such to be a red herring that deflects us away from the real issues.

This post first appeared on http://www.thatsfarming.com in February 2018

CREATING AN AGRI-FOOD STRATEGY FOR RURAL IRELAND

The following is an extract from the submission I wrote for the public consultation on Food Strategy 2025.

Question – How can the strategy for the agri-food sector be improved for the next decade?

As a follow-on from the paper [Annex A] on the success of Food Harvest 2020 and as a result of the conclusions from the broader review of Food Harvest 2020 [AFS FH2020 Review complete report], the proposal is that a twin-track strategy is required for Ireland’s rural, agricultural and food sectors. This was originally presented within a blog posting as per Annex C.

Upon writing this response, the idea has evolved to create a triple-track strategy as in the following:

1. An overall umbrella strategy for Rural Ireland to include the following sub-strategies to:

a) improve the viability of the Irish family farm primarily by enhancing output value
b) increase value-added food processing on-farm and/or within the rural community
c) create efficient routes-to-market for rural, small-scale, premium-product producers
d) integrate environmental and landscape management practices with farming systems
e) increase non-farming/food income sources for farming and non-farming rural dwellers

2. An overall umbrella agri-food processing sector strategy with the following sub-strategies to:

a) improve the returns from the existing farmer-owned co-operatives to the Irish family farm
b) support those family farms wishing to scale-up to supply processors more efficiently, and
c) an overview [to inform 3c/d] of how private-processors see their own ten-year evolution

3. Farm advisory and research and food-sector technical, marketing and sales sub-strategies for:

a) the advisory and research needs of the Irish family farm in the context of 1a and 2b above
b) the advisory and research needs to develop locally-processed premium food products [1b]
c) creating efficient routes-to-market for rural, small-scale, premium-product producers as 1c
d) the marketing and sales activities needed to support private companies and co-operatives,
and, a specific strategy to support the development and maintenance of;
e) a stand-alone food-technology capability to support private companies and co-operatives

As can be seen 3 is about creating strategies for the government-funded support services to agriculture and the food sector. These should be informed by the strategies developed within 1 and 2. It should be noted that 2c is included as an overview as opposed to a strategy document as it is not the role of government to set strategy for private sector companies. It is about allocating the Government’s funds to support the private sector as and where Government deems it appropriate and it is deemed in the interests of the Irish tax payer and the Irish economy.

The above may appear complex but it has to be viewed in the context of the industry that the strategy is meant to serve. It is far more difficult to attempt to produce a single strategic document for the entire agri-food industry as per Food Harvest 2020. One consequence of which was the inclusion of all and sundry issues but the whole being dominated by the post-2015 milk expansion target and the increase-exports indicator of strategy performance.

In the context of creating strategy, the sub-divisions should allow greater focus to be placed on the issues within a specific sub-sector and the sub-divisions within those. It should also allow more detailed analysis to be made of the economic, marketing and technical issues that will impact upon a particular sector [this contrast to, for example, the background paper to Food Strategy 2025 that provides little about the income situation in the Irish pig, poultry, potato and horticultural sectors other than that as they are near market they much be viable].

Essentially, despite its apparent complexity, the above does presents three strategies.

1. a strategy for rural Ireland that focuses on family farms, local food-processing and rural employment
2. a strategy for agri-food that focuses on the co-operative processing sector and scaling-up farming, and
3. a strategy that focuses on developing the support services to the farming and food-processing industries

Further one would add some thoughts concerning the development of strategy. The first paragraph appears to be the Food Harvest 2020 / Food Strategy 2025 approach. The second gives a step-by-step approach; albeit one that is more suited to the creation of the umbrella and sub-sector strategies discussed above.

Agricultural and agri-food sector strategy

There is a trend at present towards be the committee-of-notables approach to establishing strategy and that their experience can substitute for options analysis. This is then allied to a consultation process with stakeholders whereby all interested parties are able to submit their viewpoint for consideration. In its way it is a laudable approach. If this is, however, where the process ends it can be described as a two-legged milking stool of a methodology. The shortfall is that it does not at first identify realistic options then fully analyse them. It relies too heavily on intuition leading to the best conclusion.

Stuart Meikle has spent several years on agriculture and agri-food sector strategy and has evolved an approach to determining strategy that is a little different. It would be for a small team to (i) outline the alternatives, (ii) obtain a consensus as to the most likely viable possibilities, (iii) undertake technical, resource, market, economic and risk analysis of the options and, (iv) present the results to a committee of the ultimate decision makers. In this way a more informed discussion can be had, constraints fully recognized and considered, specific issues addressed, possible conflicts avoided and a strategy developed that is well founded on research and analysis-derived facts. This is an approach that is as equally applicable to an industry, a sector or a private business.

COULD SUCKLER BEEF FARMING EVER BE A GRAVY TRAIN?

This post first appeared online at http://www.thatsfarming.com in January 2018

Is there is an unwritten policy to replace sucklers with dairy cows? Beyond ‘policy’ there seems no limit to how often the press will tell us that dairy farming is a gravy train that makes a good deal more money than sucklers. Also, is it driven by the belief that profit per GHG unit from a dairy cow is greater than that from a suckler? But are we really being fair to the suckler cow and her keeper?

Most will be aware that I have a simple position when it comes to farming on a small-scale; it must be about value rather than quantity. If your production base is small, do not try to produce commodities. There are exceptions and one I know well is the Thai rubber industry, by far the World’s largest supplier of natural rubber but an industry dominated by hundreds of thousands of smallholder-producers. It is possible to be small and supply commodities, but it yields only a few dollars a day.

So, I do not get over-excited about the international competitiveness of the Irish dairy sector. Its scale is against it when it comes to commodity production. 2017 was a better year for milk prices, but it is a short memory that forgets about the poor prices of the two proceeding years. And we are told 2018 is not going to be great either. If one ignores the costs of family labour, land and debt, Irish milk is low cost, but nobody can survive being paid below the full cost of production for long. Ultimately, the Irish dairy sector is hamstrung by its seasonality and product mix; it cannot add the value its small-scale farmers need. And it has not invested to focus on high-value.

Meanwhile, we are being regaled with stories about the demise of the suckler beef sector. Get out and start milking. Land and location suitability anyone? Capital availability? Labour requirements? True, the dairy industry has invested a billion Euro or so in processing capacity, but is this massive investment now delivering World-leading farm-gate price? Or an EU leading price? But still, if you highlight farm incomes based upon partial costings and do not dwell too long on loan repayments, yes it can look an awful lot like gravy but it is not.

But back to sucklers. One should always ask why are farmers keeping suckler cows. The reason is that they often fit in well with the land, the farmer’s time and/or the capital available. All are valid reasons for keeping suckler cows and, frustrating as it may be for advisers and discussion-group facilitators, they may be more important factors than profit, production levels or minimising GHG emissions per unit of beef produced. The likelihood is that suckler beef farmers will be around for a while yet, there will be a lot of them and they will be operating at the scale that suits them.

The question is, accepting this, how do we improve the returns to farmers who are not willing to jump on the dairy gravy train or scale-up their beef enterprise, should the land be available? It must be about creating value. It is fine asking for more headage payments, but we need a far more holistic solution that encompasses market-delivered returns and payments for, for example, environmental and landscape ‘public goods’. We also need to know about suckler beefs NET GHG emissions.

Instead of encouraging emigration from the suckler beef sector, maybe we should be asking ourselves what the suckler beef sector could be like if one billon Euro had been invested in its processing sector by entities that were within the control of the farmer? Or realistically, one hundred, or maybe ten million? After all the last is only 1% of that invested in milk processing over the last three or four years. Would we now be talking about the demise of suckler beef farming? When we compare sucklers with dairy cows, we are not comparing like with like, one of them is being treated like Cinderella, the other pampered like one of her step-siblings.

The future of suckler beef is in the premium markets. Elsewhere, others have realized the merits of differentiating beef and suckler-reared offers a means of so doing.  Another is 100% pasture-reared. Specific breeds are coming to the fore. The environmental management of traditional landscapes and/or high-nature-value land can add to the backstory. In addition, some farmers are working out how to balance carbon sequestration [by using specific grazing practices] with GHG emissions with the goal of producing zero emission beef. It is ALL about differentiation.

An absolute fundamental in all of this is having the routes to markets. Premiums must come from the consumer. If the supply-chain operates a high-throughput, low-margin model does it have the excess profits per head to pay a premium price if it does not receive such from the final consumer [via the retailer]? Farmers need to have some control beyond the farm gate. It has gone with the collapse of the small abattoir sector as they had the operational flexibility to provide small-volume service-killing to farmer-producers. It is becoming evident that they must be reinstated or, at least, protected where they remain. With such flexibility will come the capability to develop niche-market, premium-beef products based upon location, landscape, heritage breeds and ecological farming.

This is not about alarming a beef processing industry that has evolved to handle the multitude of heads. It is about giving a few, sucker-beef farmers the option to develop their own products and to market them to premium-paying consumers. One cannot realistically expect those operating a volume-based business model to accommodate a few. Maybe a funding line of €10-20 million would deliver vibrancy to the suckler farming sector? Such an investment in small-scale processing, product development and marketing would give the sector a fighting chance; and certainly, a greater ability to provide a ‘return’ to the taxpayer on a suckler-cow headage payment, should such be granted.

One should add that this is not about volume, that is the 90% plus market segment belonging to generic, quality-assured ‘Irish beef’ whereas a key to success for premium suckler-reared beef will be to limit volume. It will be about creating origin schemes linked to location, landscape, heritage breeds and ecological farming that control supply volume.  One cannot under-estimate the importance of such. Just what breed premium schemes return a significant price bonus to the farmer where they are 50% sire-only? If the suckler cow is at least 50% pure-bred, supply volumes will be limited. It is something the French no well with their 100% Charolais and Limousin schemes.

So maybe before we write off the Irish suckler herd, we should be seeking funds to support the development of premium beef products and their routes to markets. The opportunities are there, not to mention the farming skills and land base. If anything is missing it is the leadership to challenge the status quo and to demand that change happens. As welcome as a new headage payment would be to sucker farmers, if it is to be given, it needs to be provided alongside funds to develop the suckler beef farming as the specialist, niche, flagship sector that it should be.