Food inflation will be ‘a fact of life’ – farmers herald the cheap food era

The era of cheap food is over, and people who are waiting or expecting food prices to return to previous levels are “waiting in vain,” according to ICMSA President Pat McCormack.

At the height of the National Economic Dialogue, McCormack said food inflation will “just be a fact of life” and that consumers “have to get used to paying the real cost — both economic and environmental — of the food they want to consume.”

He said much of the concern about food price increases stems from the fact that consumers and retailers have become accustomed to simply passing on their own financial preferences to farmers and primary producers.

“The era of ‘cheap food’ was coming to an end anyway, but the invasion of Ukraine massively accelerated this process. Corporate retailers have lost the ability to dictate volumes and margins backwards, and the shift to sustainability means consumers need to get used to paying the true cost – both economic and environmental – of the food they choose to consume, ” he said.

It comes as IFA President Tim Cullinan called for new financial support to help maintain food supplies, employment and economic activity in rural Ireland.

He said government policies must reflect changing circumstances over the past six months.

“Farmers are currently facing an input price crisis and need innovative financial support to sustain food supplies, employment and economic activity in rural Ireland in the weeks and months to come. While we recognize the hog, tillage and feed programs, more needs to be done.”

He said the 2023 Budget offers a real opportunity for this Government to show it understands the real situation facing Irish farmers on the ground and called on the Government to remove any unnecessary uncertainties and at least expand any existing positive taxation measures/interventions to encourage farming Task; Wealth transfer and balanced rural development for at least the next three years.

“Maximizing co-funding under the CAP and ensuring maximum BAR funding for Irish farmers would help tackle the current input crisis, but also the significant cuts in base payments that many will face in 2023 as the new CAP scheme begins “, he said .

He also proposed a temporary reduction in the VAT rate for selected agricultural commodities; Suspension of excise duty on agricultural diesel and LPG for agricultural purposes in order to reduce production costs at agricultural level.

VAT exemptions and accelerated capital allowances would support further investment and the adoption of greener practices, he said, supporting climate change ambitions of carbon neutrality by 2050.

He also said the Zoned Residential Land Tax, introduced in the Finance Bill 2022 and due to be implemented from January 2024, must ensure that all productive arable land currently and previously used for food production is exempt.