HomeBeef‘Farm operating costs will increase by up to 30% in 2022’
Catherina Cunnanehttps://www.thatsfarming.com/
Catherina Cunnane hails from a fifth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the company in 2015.
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‘Farm operating costs will increase by up to 30% in 2022’

The Independent Farmers Organisation of Ireland has warned that food prices will skyrocket on the back of Green policies.

Over the last two years, countries across Europe, including Ireland, have implemented a raft of green policies aimed at addressing climate change.

The farm group said all of these are coming at a “very substantial cost to hard-pressed consumers”.

A right to earn a living 

In a statement to That’s Farming, a spokesperson for the group said:

“While we in Independent Farmers have been outspoken where we believe these policies will have a detrimental impact on our members’ right to earn a living.”

“We have also asked our financial experts to evaluate the potential implications of these green policies for Irish consumers.”

“Irish farmers and Irish consumers are now walking the plank Varadkar, Martin and Ryan have prepared.”

Green policies

Its research suggests that the following green policies will have a significant impact on the household budget;

  1. With 2030 and 2050 targets for carbon neutrality looming large, OPEC and countries that currently export fossil fuel can now see their very lucrative income stream coming to an end.

Accordingly, the Independent Farmers said it is clear to them that OPEC et al are now ensuring that the price of gas /oil will remain high for the remaining years of world dependency on fossil fuels.

It highlighted that the current “artificially high” price of oil and gas is impacting the cost of;

  • Diesel to run farm machinery used to produce our food;
  • Plastic for wrapping silage, packaging for animal feedstuffs etc.
  • Fertiliser and associated packaging;
  • Electricity used on Irish farms.

“Fertiliser, fuel (own/contractor), silage plastic and electricity, depending on enterprise type, could make up between 40-70% of Irish farm operating costs,” the group added.

  1. The need to reduce GHG emissions in the agriculture sector driven by the Climate Action and Low Carbon Development (Amendment) Bill 2021, experts suggest, will necessitate a 51% reduction in livestock numbers across Ireland. Independent Farmers believe that for its members to survive such a cull, the price of what they produce will need to double if family farms incomes are to just standstill.
  2. The FCI is concerned about a potential 50c/L increase in the cost of green diesel in Budget 2022. It has based the calculation on removing the excise duty differential between agricultural diesel and diesel in the transport sector. Independent Farmers highlighted that this measure alone could add €300m to the cost of producing Irish food next year.
  3. Furthermore, in Budget 2022, the government appear set to increase carbon tax from €33.50/t to €41.00/t.

“Beyond these green/ environmental-led cost increases, farmers are also facing increasing operating costs in animal remedies, animal feedstuffs, labour, insurance, and increased capital expenditure costs related to spiralling cost of steel and concrete.”

Farm operating costs to increase

“With stocking levels on Irish farms set to be halved, these cost increases will in future have to be borne by 50% of livestock.”

“In summary, the Independent Farmers Organisation of Ireland believe that farm operating costs will increase by up to 30% in 2022. They are likely to remain at these high levels for the next decade.”

“In summary, for the consumer, the price of fresh produce including milk, fresh vegetables, meat, poultry etc., will all increase substantially in 2022, in addition to transport-related cost increases on all imported foodstuffs.”

“International container freight charges are at an all-time record high,” the spokesperson concluded.

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