Are farmers not covered by the Competition legislation?

Brendan Burgess

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Farmers are business people supplying a product and competing with others.

How come they are allowed to organise themselves to try to control the price of beef?

Surely the market should be allowed to decide that?

If the meat processors had a meeting to discuss controlling the price they pay to farmers, I presume that they would go to jail for it.

Brendan
 

jpd

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My understanding of the problem is that there are not "meat producers" but one huge "meat producer" and a lot of small ones that just ride along, so farmers are essentially price takers with little or no competition. The retailers, of course, are delighted to offer low price meat to consumers who are delighted to have cheap burgers, steaks, etc
 

NoRegretsCoyote

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It's a good point Brendan.

Several years ago the then-Competition Authority successfully managed to stop the IMO negotiating on behalf of GPs. This was on the grounds that they were sole practitioners and were not allowed to collude on price setting.
 

galway_blow_in

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The largest processor player ( LG) has himself a massive feed lot, he is able to manipulate the market as a consequence some of the time due to having his own supply much of the time

Not saying this is the overarching factor, right now the weak pound is a huge contributor, beef sector far too reliant on the UK market
 
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Peanuts20

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No, they are not strictly covered. They have an exemption and can organise themselves into what are known as "producer organisations" which would include the IFA and ICMSA. These organisations can then negotiate collectively.
 

galwaypat

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Hand outs more hand outs needed to keep the big tractors and jeeps on the road.I live down here in farming country you wouldn't get much off them, they don't give much back to the community, we were trying to get a farmer to to push his boundary back a couple of meters along a busy stretch of road so kids could walk to school safely he wouldn't give it. It's a case what's in it for me.
 

Brendan Burgess

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A piece on the Indo about it
Hi Paddy

That is great to see that the Competition Authority is raising the issue

Angry farmers have lashed out at the Competition and Consumer Protection Commission (CCPC), calling its rules and enforcement structure "a joke".
It comes after the commission told the Beef Plan Movement (BFM) its two-week protests outside meat plants may be unlawful and discussions about future pricing intentions is not allowed under competition law.


Brendan
 

Delboy

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3 meat processors account for 90% of that industry here. I wonder how much price variance there is between them and have the Competition Authority ever looked in their direction
 

jpd

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I hope you are not implying that they somehow worked together? people have been sued for less!

Adam Smith: The Wealth of Nations "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. "
 
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Peanuts20

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Hand outs more hand outs needed to keep the big tractors and jeeps on the road.I live down here in farming country you wouldn't get much off them, they don't give much back to the community, we were trying to get a farmer to to push his boundary back a couple of meters along a busy stretch of road so kids could walk to school safely he wouldn't give it. It's a case what's in it for me.
Sounds a bit like Bus Connects in Dublin, its not unique to farmers

  1. Current price a factory pays a farmer for a kilo of beef €3.65 or so depending on the quality
  2. Price Tescos will charge for a kilo of beef- approx €10 depending on the cut and process, say €8 to €12

Take away all the subsidies and handouts a farmer gets, let him charge a market rate based on costs + margin and then do the maths as to what your weekly steak will cost
 

Romulan

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Selling raw material and being a price taker is not where you want to be and they should have been trying to pivot away from the current position for years. Now they face the twin storms of BREXIT and Green/environmental pressures never mind the problems of the industry structure.

They also appear to favour being a business when it suits them and not being a business when it suits them and I think this is a factor in there being very little sympathy for them.

This is something that has vexed me from some time and I always raise it with my rural family in laws.
My late FIL was quite an economist and could discuss at length.

I'd love to know what happened to the likes of the farmers that setup co-ops and met challenging times head on in the past?

Why not set up your own factories, or drive the development of local farmers markets, or better links to local butchers etc. etc.
 

Delboy

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  1. Current price a factory pays a farmer for a kilo of beef €3.65 or so depending on the quality
  2. Price Tescos will charge for a kilo of beef- approx €10 depending on the cut and process, say €8 to €12
I heard a discussion on this on the radio yesterday with the head of the IFA.
He said the farmers were getting €2 per kilo, the meat processors were taking a €2.90 piece of the action and the retailers were on around €5.90
 

Romulan

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I have heard the same discussion on the radio about farmers/processors/retailers for as long as I can remember.

The world has changed and the model no longer works.

Many older members in my family were involved in an industry that died out in the late 80s, car assembly.
They all had to adapt, change, move on to other ways of doing things.

Not pleasant, unwelcome at the time and difficult but it had to be done.

I see the IFA as part of the problem, same old same old

And lest anyone think otherwise, I would love to see a strong vibrant farming industry.
 

galway_blow_in

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Isn't milk internationally benchmarked? Why not beef?
I can't answer that one I'm afraid but I check out the agri press on and off and the same benchmarks are not used, milk price auctions in new Zealand effect the dairy market here but beef seems more autonomous
 
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