ICMSA concerned that Co-op sustainability schemes are locking farmers into anti-competitive inputs pricing

The President of ICMSA has warned that while there is a very strong commitment from farmers to proactively pursue more sustainable farming practices and technologies in that effort, farmers are becoming wary of practices that are ostensibly about helping that commitment but which seem to amount to nothing but anti-competitive pricing and data harvesting. Pat McCormack said that suspicion was growing that many Co-ops are using farmers’ drive for sustainability to ‘lock them in’ to anti-competitive arrangements and other aspects that have nothing whatsoever to do with sustainability.

“Farming is a business of tight margins and farmers are entitled to buy their inputs from the most cost-efficient source they can find. Obviously, farmers will support their own Co-op in the first instance – provided the price is competitive and provided the farmer is not being forced or compelled under various schemes to purchases inputs from their Co-op. In addition, we have these so-called ‘data sharing arrangements’ that are being built-into some sustainability schemes and on these farmers have a right to expect a certain level of privacy and we would think are entitled to question the need for some of these data sharing arrangements. Milk processors have become very good at requesting and sharing farmer data, but when you ask a Co-op about their own margins, for example, you’ll hit a wall of silence.  We need to see a level of fairness and reality brought to these schemes”, observed the ICMSA President.

Mr. McCormack said that dairy farmers are growing increasingly concerned and irritated by the practice of effectively compelling them to buy inputs from their own Co-op in order to receive milk price bonuses under the guise of sustainability. He said that compelling farmers in this way had absolutely nothing to do with sustainability and is simply an anti-competitive practice.  

“Whether it’s feed or fertiliser, there are EU rules and national rules setting down the legal requirements. There are also quality assurance schemes with additional requirements – such as the Bord Bia Feed Quality Assurance Scheme – so farmers should be allowed buy their inputs that meet the required legal standard from the most competitive source possible.  If Co-ops want to pay bonuses to farmer for purchasing inputs from that Co-op, then they should be upfront about it and not hide it behind the pretence of sustainability schemes.  Farmers operate in a competitive world and need to be able to respond accordingly. If Co-ops want farmers to buy their inputs from them then their boards should concentrate on ensuring that those inputs are competitively priced – and not be trying to lock farmers in under any kind of guise. Farmers have the right to choose where they purchase their inputs in exactly the way as the Co-op do”, concluded Mr. McCormack.

Ends         18 January 2023

Pat McCormack, 087-7608958

President, ICMSA.

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office