E Hobbs:Rigging of the market will hike food prices

Villa05

Now that the Housing market has been rigged by the establishment, the focus now turns to Groceries with an New quango set up to restore the balance between food producers and Supermarkets
http://www.independent.ie/opinion/analysis/rigging-of-the-market-will-hike-food-prices-29971603.html

After falling to 17 per cent above the European average from a high of 38 per cent just before the economic crisis, Irish groceries are set to reverse the gains and climb again.
Bull-headed measures are afoot to set up a grocery quango together with an ombudsman that will diminish competition in the Irish grocery market – but comes disguised as a cockeyed Statutory Code of Conduct that attempts to reverse the imbalance of power between those who own the shelves, the large retailers, and those who make the food, food producers and processors...............

Had anyone on the JOC a background in consumer affairs or even in economics? Apparently not. There is, however, one clear thread:

Chairman Andrew Doyle TD, FG farmer, 82 acres;

Vice-chairman Pat Deering TD, FG farmer, undisclosed number of acres in Co Carlow;

Tom Barry TD, FG farmer, Agri Business, landlord, 340 acres;

Martin Heydon TD, FG farmer, 222 acres;

Pat O'Neill, Senator FG farmer, undisclosed number of acres, Co Kilkenny;

Michael Comiskey, Senator, FG farmer, undisclosed number of acres, Co Leitrim;

Michael McNamara TD, Labour farmer/barrister, undisclosed number of acres, Co Clare.

The Vested Interests fight back.....

Markcheese

Is the Market place not rigged at the present ?? Below cost selling distorts a true market, and disrupts competition, I'd argue that food prices have come down because of the crash and the entry of Aldi/lidl and nothing to do with lifting the ban on the groceries order ..

Nody

Markcheese wrote: »

Is the Market place not rigged at the present ?? Below cost selling distorts a true market, and disrupts competition, I'd argue that food prices have come down because of the crash and the entry of Aldi/lidl and nothing to do with lifting the ban on the groceries order ..

Actually the other way around; that's part of the market to use tempting offers at a loss to gain more sales. If you want to talk disruption talk about the money EU pumps into the farmers in EU...

A Scoundrel

Another cynical 'prediction' for the relentlessly parochial middle class by E. Hobbs Esq.

For sure, food prices have been increasing globally, and this situation will persist, probably reaching in a large scale food crisis within the current decade. . Is that the fault of some 80-acre Irish farmer in this 'Grocery quango'?!

No, it's an economic inevitability based on rapidly growing economies faced with poor self sufficiency in cereal, abnormal weather disasters, and speculation on commodities resulting from the unstable sovereign capital market, a perfect storm.

Pardon my cynicism here. It looks like Hobbs is sinking his claws into a 'sure thing' prediction for his own political/ cynical/ self promoting objectives.

brent_popey

eddie hobbs couldn't predict Tuesday morning on Monday night

he was encouraging people to buy gold two years ago , its down 30%

Markcheese

Nody wrote: »

Actually the other way around; that's part of the market to use tempting offers at a loss to gain more sales. If you want to talk disruption talk about the money EU pumps into the farmers in EU...

The eu and governments pump money into many stupid things, and they give a lot to farmers (but more to agri-business), but the products themselves are now world traded comodities ,with
less and less tariffs more goods are pretty much at world prices..

sin_city

All prices will increase a lot when the velocity of the mega amount of printed money by the ECB starts trickling down.

It's appearing in the Stock Markets at the moment but it will hit foods more and more.

A Scoundrel

sin_city wrote: »

All prices will increase a lot when the velocity of the mega amount of printed money by the ECB starts trickling down.

It's appearing in the Stock Markets at the moment but it will hit foods more and more.

That makes no sense. Overall, European equities have rallied about as much as a sick pup. Global equities bear no direct relationship with the ECB's asset purchases, rather with doubts about the ECB's own backbone & that of its backers, if anything.

If this recession is remembered for anything, it will be the rise of doom-saying evangelicals.

sin_city

A Scoundrel wrote: »

That makes no sense. Overall, European equities have rallied about as much as a sick pup. Global equities bear no direct relationship with the ECB's asset purchases, rather with doubts about the ECB's own backbone & that of its backers, if anything.

If this recession is remembered for anything, it will be the rise of doom-saying evangelicals.

It actually makes perfect sense. The price of everything was bloated pre crisis due to the low interest rates which caused the boom and bust.

Prices were going down in houses, stocks and everything else and the central banks jumped with the printing to create the next boom, which will eventually bust on an even bigger scale.

The money printing world wide has caused all stock markets to gain since 2008, not because of good economic growth but because of inflated money supply.

We can't tell when the inflation will hit, but it will hit and food prices are one obvious area.

Why are people rioting all over the world?

Some would say the price of food....it doesn't affect westerners as much as poorer countries as the level of disposable income for us simply decreases, while for people in say Egypt, it is a matter of life and death.

Anyway, economics 101, you inflate the currency supply, eventually prices of everything increase...Eg, Japan at the moment.

Some economists and bankers will tell us that inflation is a good thing.....I don't know why exactly. If you are struggling and things are more expensive then I don't understand this thinking.

A Scoundrel

sin_city wrote: »

It actually makes perfect sense. The price of everything was bloated pre crisis due to the low interest rates which caused the boom and bust.

Prices were going down in houses, stocks and everything else and the central banks jumped with the printing to create the next boom, which will eventually bust on an even bigger scale.

...Anyway, economics 101

That's not economics 101. That's youtube economics.

It is the interest rate cuts and the inadequacy of the ECB's asset purchasing policies that is causing investors to flock into equity purchases in order to deliver short term dividends. That is transition year economics. I do not make this remark to change your mind. I make this remark to correct the homework of any transition year economics student who googles "agriflation" and unwittingly copies this thread for his homework.

sin_city

A Scoundrel wrote: »

That's not economics 101. That's youtube economics.

It is the interest rate cuts and the inadequacy of the ECB's asset purchasing policies that is causing investors to flock into equity purchases in order to deliver short term dividends. That is transition year economics. I do not make this remark to change your mind. I make this remark to correct the homework of any transition year economics student who googles "agriflation" and unwittingly copies this thread for his homework.

Wait, are you saying that inflation does not cause rising prices?
Is the money supply not currently being massively inflated?

I don't know where the Youtube comes into it? I suppose you were against TV and Radio when they first hit too. The only reliable source can be the academic books.


Please answer the above questions.

Also, I work for a food company and guess what...the prices are being raised on all products this year due to the prices on the respective commodities.

Hopefully I have provided my opinions on the facts without coming across as smug as you.

A Scoundrel

sin_city wrote: »

I don't know where the Youtube comes into it?

Well, sin_city, this is a bit of a bugbear of mine, you see.

I guess it all harks back to the fact that I envy Doctors, biologists, engineers, lawyers, and IT professionals, who may use youtube as a valid educational resource for their own professional advancement.

Yet, for some unknown reason, any economics professional (or other literate person brave enough to type 'monetary policy' or (worse!) 'inflation' into youtube) is likely to be confronted with the most academically and logically obnoxious material on the known internet.

I don't know why this is. But I do get queasy to see it regurgitated.

Also, I work for a food company

I sell soot brushes to chimney sweeps. Shall I tell you all about global warming?

sin_city

A Scoundrel wrote: »

Well, sin_city, this is a bit of a bugbear of mine, you see.

I guess it all harks back to the fact that I envy Doctors, biologists, engineers, lawyers, and IT professionals, who may use youtube as a valid educational resource for their own professional advancement.

Yet, for some unknown reason, any economics professional (or other literate person brave enough to type 'monetary policy' or (worse!) 'inflation' into youtube) is likely to be confronted with the most academically and logically obnoxious material on the known internet.

I don't know why this is. But I do get queasy to see it regurgitated.

Ah, it really must pain you then that the Alfred Nobel did want a prize given in his name to economics then.

I see you didn't answer my basic question.

Anyway, there are plenty of books out there from people who have made money investing in a way contrary to they way you think I would say.

A Scoundrel wrote: »

I sell soot brushes to chimney sweeps. Shall I tell you all about global warming?

More smugness. I told you that a large food company is raising its prices due to the price of the commodities increasing.

How is that not relevant?

A Scoundrel

sin_city wrote: »

Ah, it really must pain you then that the Alfred Nobel did want a prize given in his name to economics then.

I couldn't care less.

More smugness. I told you that a large food company is raising its prices due to the price of the commodities increasing.

How is that not relevant?

Food prices are increasing, indeed. Anyone with a pair of eyes can see this.

Commodities are still increasing but I am saying is that the ECB's asset purchases are not directly causal. In fact, if anything, the ECB's indecision and vacillation is indirectly aggravating agriflation. Any notion of ECB 'boldness' in stoking inflation is simply un/misinformed.

sin_city

A Scoundrel wrote: »

I couldn't care less.

Food prices are increasing, indeed. Anyone with a pair of eyes can see this.

Commodities are still increasing but I am saying is that the ECB's asset purchases are not directly causal. In fact, if anything, the ECB's indecision and vacillation is indirectly aggravating agriflation. Any notion of ECB 'boldness' in stoking inflation is simply un/misinformed.

I don't actually think we've seen much inflation compared to what is coming......Can you please let me know what you think is causing food prices to rise?

I'm not saying they are currently very high....but I think we will see large increases in price and mostly because of actions of central banks.

I look at this from a historical point of view. Easy monetary policy will eventually cause high inflation....and it's been very very easy for a long time.

You seem very sure on your assumption and maybe you are right....did you have the foresight to see the crash in 07/08 and if so did you do well out of it?

andrew

Aren't there EU free market regulations which prohibit interference with prices?

There should be, if there aren't.

andrew

sin_city wrote: »

Is the money supply not currently being massively inflated?

Nope. Got any data to suggest that it is?

A Scoundrel

sin_city wrote: »

Can you please let me know what you think is causing food prices to rise?

I've already mentioned the major factors - unusual climate events, poor self sufficiency in cereals, growth of biofuel, speculation on commodities in general. For sure, the last part stems, in part from wider instability in the advanced economies, and within that explanation, monetary stimUlus is an indirect factor when combined with interest rate cuts.

But to proclaim some direct causal relationship between ECB's asset purchases and global agriflation is not even simplistic, it's factually wrong.

Godge

A Scoundrel wrote: »

If this recession is remembered for anything, it will be the rise of doom-saying evangelicals.

100% agree.

How many times was it predicted since 2008 that Ireland would default on its debt by the end of the week? And it never happened.

Villa05

A Scoundrel wrote: »

I've already mentioned the major factors - unusual climate events, poor self sufficiency in cereals, growth of biofuel, speculation on commodities in general. For sure, the last part stems, in part from wider instability in the advanced economies, and within that explanation, monetary stimUlus is an indirect factor when combined with interest rate cuts.

But to proclaim some direct causal relationship between ECB's asset purchases and global agriflation is not even simplistic, it's factually wrong.

That explains global prices, We are after having an ecomomic depression, yet our food prices are 17% above the European average. This is despite Ireland having a massive food industry.

Fair enough that difference has fallen from 38% to 17%. Is this fall a problem or a correction. To me it is a correction, and to see my Government setting up a quango, costing god knows how much stuffed with farmers stinks of everything that is rotten with this country.

The usual suspects looking after themselves at the expense of everyone else

A Scoundrel

Villa05 wrote: »

That explains global prices, We are after having an ecomomic depression, yet our food prices are 17% above the European average. This is despite Ireland having a massive food industry.

A massive food industry which exports to the EU and the Rest of the World. Dramatic increases in EU and global food prices are always going to drive up domestic prices.

I am always very wary of comparing Irish food prices to those of the EU, because of the differences in consumer behaviour, especially since the crash. Many Irish consumers have migrated away from well known brands, and into cheaper specific brands or brandless products, and this may not be the case in the stronger EU markets like the mainland Northern Europeans. To be blunt: many Irish people now shop in Lidl and Aldi, whereas the Northern Europeans are not. But the mechanisms of evaluating baskets of food items has not reflected this.

Therefore, it is not only possible that the official statistics are exaggerating food inflation in this country, but economic research since the 1970s, including research in this country, shows that consumers, especially the low waged and those of low educational attainment, are notorious for overestimating inflation.

As it happens, it often suits certain economic actors for this misperception of high inflation to persist.

So I am skeptical, but I am willing to change my mind...

Can we get down to brass tacks here, how are you proposing the market is currently being rigged?

Villa05

A Scoundrel wrote: »

A massive food industry which exports to the EU and the Rest of the World. Dramatic increases in EU and global food prices are always going to drive up domestic prices.

I am always very wary of comparing Irish food prices to those of the EU, because of the differences in consumer behaviour, especially since the crash. Many Irish consumers have migrated away from well known brands, and into cheaper specific brands or brandless products, and this may not be the case in the stronger EU markets like the mainland Northern Europeans. To be blunt: many Irish people now shop in Lidl and Aldi, whereas the Northern Europeans are not. But the mechanisms of evaluating baskets of food items has not reflected this.

Therefore, it is not only possible that the official statistics are exaggerating food inflation in this country, but economic research since the 1970s, including research in this country, shows that consumers, especially the low waged and those of low educational attainment, are notorious for overestimating inflation.

As it happens, it often suits certain economic actors for this misperception of high inflation to persist.

So I am skeptical, but I am willing to change my mind...

Can we get down to brass tacks here, how are you proposing the market is currently being rigged?

Currently it is not rigged hence the fall in prices compared to the Euro average, however the the setting up of this Quango is seen as the first step on this path.

With regard to Aldi, as a regular customer, there food is excellent, of the highest quality and many products sourced in Ireland

goose2005

Markcheese wrote: »

Is the Market place not rigged at the present ?? Below cost selling distorts a true market, and disrupts competition, I'd argue that food prices have come down because of the crash and the entry of Aldi/lidl and nothing to do with lifting the ban on the groceries order ..

Below cost selling is a red herring, it has no bearing on anything. Especially not when compared to the countless billions paid out to landowners in subsidies.

Icepick

That other thing that bothers me is the xenophobia inherent to economic protectionism.

See: Playing of the green card veers into racial prejudice in row over cut-price veg

sin_city

A Scoundrel wrote: »

I've already mentioned the major factors - unusual climate events, poor self sufficiency in cereals, growth of biofuel, speculation on commodities in general. For sure, the last part stems, in part from wider instability in the advanced economies, and within that explanation, monetary stimUlus is an indirect factor when combined with interest rate cuts.

But to proclaim some direct causal relationship between ECB's asset purchases and global agriflation is not even simplistic, it's factually wrong.

Really? I mean I get the list of factors and yes, they could increase the price...fair enough.

Are you saying that inflating the money supply does not have an affect on prices?

Godge wrote: »

100% agree.

How many times was it predicted since 2008 that Ireland would default on its debt by the end of the week? And it never happened.

Thank Goodness we've reached the end of kicking the can down the road.....Great...everything is fixed

noodler

sin_city wrote: »

All prices will increase a lot when the velocity of the mega amount of printed money by the ECB starts trickling down.

It's appearing in the Stock Markets at the moment but it will hit foods more and more.

To the best of my knowledge, all the LTROs the ECB have engaged in so far were not sterilised - i.e. there was a trillion new euros lent with no matching withdrawal in the Ms from the ECB. This contrasts with the SMP when the ECB bought sovereign bonds on the secondary market (these transactions were sterilised). The majority of other ECB monetary policy actions were also sterliised I believe.

But if anything, surely any money the ECB have been 'printing' (which is so miniscule compared to the BoJ, BoE and FED) would have increased inflation and a withdrawl of this money would decrease inflation.

noodler

Godge wrote: »

100% agree.

How many times was it predicted since 2008 that Ireland would default on its debt by the end of the week? And it never happened.

The country is now paying 7.3bn in interest as of last year, or almost 20% of all exchequer tax revenue.

(or 12% of all revenues if you include non-exchquer soucres like PRSI, motor tax etc).

We really are at tipping point in terms of financial sustainability. The country needs a few things to go its way over the next few years in order to ensure the debt dynamics go the right way.

andrew

sin_city wrote: »

Are you saying that inflating the money supply does not have an affect on prices?

The answer to that question is that in the short run no, no it does not. Also, when you say the money supply is currenty being inflated, you're wrong:

Every measure of the money supply is growing at or below trend:
broad and narrow.PNG

European banks, to the extent that they have money in reserve, aren't lending it out:
loans.PNG

Speaking of Reserves, they're reducing their balances with the ECB; but still, no increase in lending:
reserves.PNG

Which is why inflation is so low in the Eurozone:
inflation.PNG

In fact, with regard to this thread,food and drink prices have barely changed in the last 3 years:
Food and Drink inflation.PNG


So, to the extent that food prices are rising (which they aren't), it's nothing to do with monetary policy or the ECB.

SupaNova2

A Scoundrel wrote: »

I am always very wary of comparing Irish food prices to those of the EU, because of the differences in consumer behaviour, especially since the crash. Many Irish consumers have migrated away from well known brands, and into cheaper specific brands or brandless products, and this may not be the case in the stronger EU markets like the mainland Northern Europeans. To be blunt: many Irish people now shop in Lidl and Aldi, whereas the Northern Europeans are not. But the mechanisms of evaluating baskets of food items has not reflected this.

Therefore, it is not only possible that the official statistics are exaggerating food inflation in this country.

So if the price of quality beef rises to a price I cannot afford and I substitute it with an alternative from Aldi there is no food price inflation. :rolleyes:

eigrod

brent_popey wrote: »

eddie hobbs couldn't predict Tuesday morning on Monday night

Markcheese

SupaNova2 wrote: »

So if the price of quality beef rises to a price I cannot afford and I substitute it with an alternative from Aldi there is no food price inflation. :rolleyes:

No , but if my food bill falls considerably because I buy in Aldi for no drop in quality is my food bill deflated..? .
And comparing beef bought in a good butcher here with the supermarket and with that bought on the continent is a bit tricky ... How do factor in quality ? Grass fed ,grain fed, swanky neighbourhood .. Ect ,

SupaNova2

Markcheese wrote: »

No , but if my food bill falls considerably because I buy in Aldi for no drop in quality is my food bill deflated..? .
And comparing beef bought in a good butcher here with the supermarket and with that bought on the continent is a bit tricky ... How do factor in quality ? Grass fed ,grain fed, swanky neighbourhood .. Ect ,

Tricky yes but that's not my job but the job of those coming up with the CPI. I disagree with some substitution though.

As for beef, I subjectively value my beef based on how good it tastes. If I have to replace my preferred beef with something that doesn't match up from Aldi because I can no longer afford it due to price inflation, the CPI making a substitution and saying their is no food price inflation isn't worth a damn to me not that I expect it to anyway. If you found something that matches up from Aldi at a better price then good for you.

A Scoundrel

SupaNova2 wrote: »

So if the price of quality beef rises to a price I cannot afford and I substitute it with an alternative from Aldi there is no food price inflation. :rolleyes:

No. It is not that there is no reported inflation, but that the accuracy of the implications for price pressure on houseolds may have been affected by changes in consumer behaviour.

Retail customers are notoriously disloyal, and their purchases are influenced by their confidence in their financial situation and perceptions of the macroeconomy.

It is impractical & impossible for the various indices to keep up with rapid representative changes in consumer behaviour. When I recently read one of those indices for Ireland, I was interested to note that representative factors in the CSO's methodology had not changed since 2009. The retail atmosphere has changed drastically in that time.

So it is important to note that the CSO may be understating consumer migration away from specific and well known brands, and therefore, to the extent that inflation is reported to be problematic, the agency may be overstating the food and drink price burden on households.

To be blunt and simplistic, if the CSO still have us eating out in restaurants, ordering a lot of fast food, and shopping for the meatiest Superquinn Filet Mignon, whereas we are cooking at home (as anecdotal evidence would suggest) and migrating to quality produce in budget supermarkets, then we have a problem with the data.

5live

goose2005 wrote: »

Below cost selling is a red herring, it has no bearing on anything. Especially not when compared to the countless billions paid out to landowners in subsidies.

I'm sure the EU has exact figures for the annual amount paid out in The Single Farm Payment if you were to google it.

I often wonder if an economist has arrived at an annual cost for legislative subsidies for our economy eg necessity of work permits for foreign workers, minimum wage, paid holidays, sick pay, maternity benefit etc etc etc that farmers are not elegible for but pay for in general taxation.

Perhaps the best solution would be to abolish all subsidies and see what happens then:)

freedominacup

5live wrote: »

Perhaps the best solution would be to abolish all subsidies and see what happens then:)

Any takers??:rolleyes:

freedominacup

goose2005 wrote: »

Below cost selling is a red herring, it has no bearing on anything. Especially not when compared to the countless billions paid out to landowners in subsidies.

For the majority of farmers in this country you are exactly right in your first sentence and more or less exactly wrong in your second.

Below cost selling of beef and dairy products in this country products which the vast majority of farmers in this country have an involvement with is irrelevant. We export 80% (and about to rise rapidly) of our dairy output and 90% (also about to rise) of our beef output. What retailers here do with below cost selling is annoying, and many of us feel it's diminishing how our work is valued but largely irrelevant.

The billions are far from countless and amount to less than 1% of total E.U. government budgets. I don't mind if you want to scrap them as long as I can compete on a level playing field with farmers in other countries with free access to GM seeds, the full suite of growth promoters and artificial hormones, re-licensing of all the very useful and cheap chemical sprays which have been taken off the E.U. market (more or less on a whim) over the past 15 years, removal of all restrictions on the usage of chemical fertilisers, removal of all restrictions on application of animal, industrial and human waste, and removal of all restrictions on removal of field boundaries/hedges/groves etc.

I have no problem with subsidies being removed in those circumstances but as long as the E.U. consumer wants to impose those restrictions on farmers they are going to have to pay for them. You call them "public goods" they were your idea, you valued them and decided you wanted to pay to have them. If you change your mind let me know.

andrew

freedominacup wrote: »

For the majority of farmers in this country you are exactly right in your first sentence and more or less exactly wrong in your second.

Below cost selling of beef and dairy products in this country products which the vast majority of farmers in this country have an involvement with is irrelevant. We export 80% (and about to rise rapidly) of our dairy output and 90% (also about to rise) of our beef output. What retailers here do with below cost selling is annoying, and many of us feel it's diminishing how our work is valued but largely irrelevant.

The billions are far from countless and amount to less than 1% of total E.U. budgets. I don't mind if you want to scrap them as long as I can compete on a level playing field with farmers in other countries with free access to GM seeds, the full suite of growth promoters and artificial hormones, re-licensing of all the very useful and cheap chemical sprays which have been taken off the E.U. market (more or less on a whim) over the past 15 years, removal of all restrictions on the usage of chemical fertilisers, removal of all restrictions on application of animal, industrial and human waste, and removal of all restrictions on removal of field boundaries/hedges/groves etc.

I have no problem with subsidies being removed in those circumstances but as long as the E.U. consumer wants to impose those restrictions on farmers they are going to have to pay for them. You call them "public goods" they were your idea, you valued them and decided you wanted to pay to have them. If you change your mind let me know.

Just with regard to the bolded part of your post; The CAP is the largest item of expenditure in the EU budget.

5live

freedominacup wrote: »

Any takers??:rolleyes:

You're funny FIACra.

Dont ever change:D

freedominacup

I edited for the hard of thinking see above.

Total eu budgets

http://www.airo.ie/news/eu-general-government-expenditure-amounts-6182-billion-or-503-gdp-ireland-67-gdp

And you can see total cap expenditure here in second graph at around €40 billion or far less than one percent of total eu expenditure.


http://ec.europa.eu/agriculture/cap-post-2013/graphs/graph1_en.pdf

Agriculture is the only area of government expenditure in the EU with a common policy hence CAP, common agricultural policy. There is a small amount of national expenditure on agriculture but the main policy planks and the main expenditure are dictated and funded at E.U. level. When was the last round of negotiations on a common health or education policy and budgets for the E.U.? The vast bulk of government expenditure is outside agriculture despite all imprssions to the contrary.

andrew

freedominacup wrote: »

I edited for the hard of thinking see above.


And you can see total cap expenditure here in second graph at around €40 billion or far less than one percent of total eu expenditure.

http://ec.europa.eu/agriculture/cap-post-2013/graphs/graph1_en.pdf

Maybe I really am hard of thinking, but in the document you linked right there, it says (emphasis mine)

This graph shows the development of CAP expenditure over the years as share
of the EU budget. This share has decreased very sharply over the past 25
years, from almost 75% to 44%

44%; it's 44% of EU expenditure, it says it right there. I don't know where you're getting "far less than one percent of total eu expenditure."


Also, I wasn't commenting on the pros/cons of the CAP, or what I think of it, I was just commenting on the figure you quoted.

hfallada

A Scoundrel wrote: »

No. It is not that there is no reported inflation, but that the accuracy of the implications for price pressure on houseolds may have been affected by changes in consumer behaviour.

Retail customers are notoriously disloyal, and their purchases are influenced by their confidence in their financial situation and perceptions of the macroeconomy.

It is impractical & impossible for the various indices to keep up with rapid representative changes in consumer behaviour. When I recently read one of those indices for Ireland, I was interested to note that representative factors in the CSO's methodology had not changed since 2009. The retail atmosphere has changed drastically in that time.

So it is important to note that the CSO may be understating consumer migration away from specific and well known brands, and therefore, to the extent that inflation is reported to be problematic, the agency may be overstating the food and drink price burden on households.

To be blunt and simplistic, if the CSO still have us eating out in restaurants, ordering a lot of fast food, and shopping for the meatiest Superquinn Filet Mignon, whereas we are cooking at home (as anecdotal evidence would suggest) and migrating to quality produce in budget supermarkets, then we have a problem with the data.

You are sort of correct. The CSO monitors a few hundred irish consumers spending for a period to see what they spend their money on. They create an "average spending pattern", which is only update every 5 years meaning. Meaning within a few years it gets quite inaccurate. eg the last one had no everyday technology like iphones, tablets and laptops which is something we all buy every 18-24 months

freedominacup

andrew wrote: »

Maybe I really am hard of thinking, but in the document you linked right there, it says (emphasis mine)



44%; it's 44% of EU expenditure, it says it right there. I don't know where you're getting "far less than one percent of total eu expenditure."


Also, I wasn't commenting on the pros/cons of the CAP, or what I think of it, I was just commenting on the figure you quoted.

Agriculture is the only area of government with a common budget and policy across the entire E.U.. All other areas of government spending are contolled by national governments. There is a small element of agriculture spending controlled and funded at national level the rest is centrally funded so the figure for agriculture is skewed when only viewed in terms of the eu budget. There is no common defence spending, or health or education. When you consider that the Irish budget for general government spending for one percent of the E.U.'s population is larger than the entire E.U. spend on agriculture you get some idea of how small ag spending would be if those big three departements were subject to a similar system of common policies and spending. "Agriculture is the largest area of E.U. spending" is a very handy rod for farmers backs when ever any debate on agriculture takes place and while is absolutely correct is also totally misleading. Personally I have been against ag subsidies from the outset and cannot believe they have lasted this long. Their longevity and robust position in the face of public disquiet only goes to show how far and how much politicians and senior civil servants are preared to go and to spend to retain control of an industry.

The politicians and ciivil servants wanted to take an axe to the subsidies two years ago but couldn't as market returns had risen to such an extent and looked to be on an upward plane for the forseeable future. This meant that farmers would very quickly find themselves in a position where it made more sense to withdraw from the subsidy system and push output as they would get a better return without the payments had they been cut to the extent originally planned by the commission. They were unwilling to lose control so the payments remained high and are now fixed more or less for the next 5-6 years with the only falls being relative ones as they will not rise with inflation.

Scrap the subsidies if you like just as long as we are operating on a level playing field with our competitors, either allow us the same freedoms to operate that they have or legislate so that they must produce to the same standards and with the same restrictions on inputs as we do before they an export into the E.U..

Hobbs article and the politicians he refers to are all deluding themselves if they think the application of some new groceries order will have any impact on farmers here. The optics will be good for them if they are trying to win rural votes but that's as far as it goes. We don't sell enough to the Irish supermarkets, in fact our two biggest milk processors have set their sights on supplying only the absolute minimum to supermarkets to the extent that as late as November Glanbia were considering pulling out of supplying fresh milk, certainly own brand, to the Irish market. They have since announced investment in the liquid milk business but this is for export with a UHT plant being built and a drive to develop Asian, African and Middle Eastern markets for the product. Basically John Moloney left that business muddle along for the past few years and now Siobhan Talbot is trying to do something with it.

andrew

freedominacup wrote: »

Agriculture is the only area of government with a common budget and policy across the entire E.U...... There is no common defence spending, or health or education.

I just think its crazy, that you would put 'agriculture' into the same categories as defence or health or education. It makes no sense to me to have agriculture as an 'area of government' that needs any spending. It's an industry, just like textiles or technology etc.

Scrap the subsidies if you like just as long as we are operating on a level playing field with our competitors, either allow us the same freedoms to operate that they have or legislate so that they must produce to the same standards and with the same restrictions on inputs as we do before they an export into the E.U..

But foreign competitors DO have to comply with EU standards before they can export to EU countries; they have to meet technical, sanitary and phytosanitary regulations. In addition, there are heavy tariffs of between 18% and 28% on the import of agricultural goods into the EU. So farmers are already massively insulated from any competition from the rest of the world; why do they need subsidies on top of this? Contrast that with other forms of manufacturing, which are also subject to EU regulations, but much more exposed to world market forces (tariffs are only about 3% for manufactured goods). What makes farming so special, that it deserves subsidies on top of everything else?

So in terms of prices and the thread's topic: EU consumers are paying more for their food than they should have to: firstly they pay at the shops an inflated price, because of the aformentioned tariffs and trade restrictions. Secondly, they pay via their taxes, which go into subsidies.

So, that's why I'd be pretty opposed to any moves by the government to control (i.e. prevent the reduction of) agricultural prices. They're already higher than they need to be, and we already protect the agricultural industry a huge amount, even though it only employs only 5% of the total number of people employed (table 8), farming wages contribute to only 3% of disposable income (table 4) and farming output amounts to only 2% of GNP (pg 9). The power of the farming lobby is massively out of proportion with it's contribution to the economy.

Good loser

andrew wrote: »

I just think its crazy, that you would put 'agriculture' into the same categories as defence or health or education. It makes no sense to me to have agriculture as an 'area of government' that needs any spending. It's an industry, just like textiles or technology etc.




But foreign competitors DO have to comply with EU standards before they can export to EU countries; they have to meet technical, sanitary and phytosanitary regulations. In addition, there are heavy tariffs of between 18% and 28% on the import of agricultural goods into the EU. So farmers are already massively insulated from any competition from the rest of the world; why do they need subsidies on top of this? Contrast that with other forms of manufacturing, which are also subject to EU regulations, but much more exposed to world market forces (tariffs are only about 3% for manufactured goods). What makes farming so special, that it deserves subsidies on top of everything else?

So in terms of prices and the thread's topic: EU consumers are paying more for their food than they should have to: firstly they pay at the shops an inflated price, because of the aformentioned tariffs and trade restrictions. Secondly, they pay via their taxes, which go into subsidies.

So, that's why I'd be pretty opposed to any moves by the government to control (i.e. prevent the reduction of) agricultural prices. They're already higher than they need to be, and we already protect the agricultural industry a huge amount, even though it only employs only 5% of the total number of people employed (table 8), farming wages contribute to only 3% of disposable income (table 4) and farming output amounts to only 2% of GNP (pg 9). The power of the farming lobby is massively out of proportion with it's contribution to the economy.

Farming is special because food is special - specifically food security. It has huge geopolitical implications. Also in western Europe the preponderance of dispersed small farms is a pattern politicians are slow to interfere with drastically.

The last world trade deal failed because India would not allow the USA free access to the Indian market. Have you any idea why these massive countries thought the issue that important?

flutered

my two cents is, dairy farmers are giving 250 euro per acre, per year for rented land, for a five year period, two years ago it was 100 euro per acre, i wonder what the geezer hobbs would make of that.

5live

flutered wrote: »

my two cents is, dairy farmers are giving 250 euro per acre, for rented land, for a five year period, two years ago it was 100 euro per acre, i wonder what the geezer hobbs would make of that.

An awful lot of the increase in price for rented ground is due to the changeover from the old level of SFP to the new level of SFP and some farmers gambling that the new system would favour their increased areas/levels of SFP.

dlouth15

Good loser wrote: »

Farming is special because food is special - specifically food security.

It depends on what is being produced. Why are we subsidising beef production for example, most of which is exported? Subsidy in Ireland undermines food security. It is not targeted towards foods we would need should international difficulties arise.

Farmer Pudsey

dlouth15 wrote: »

It depends on what is being produced. Why are we subsidising beef production for example, most of which is exported? Subsidy in Ireland undermines food security. It is not targeted towards foods we would need should international difficulties arise.

First of all we are not subsidising Beef production the EU is. Virtually no beef from the EU is exported outside the EU. The EU is a nett importer of meat products. Chickens from Thailand and Lamb from New Zealand are the two biggest meat imports we have. The reason that little beef is imported at present is that no Country is willing to produce Beef to EU standards (hormone free). Canada has failed to fill it beef quota for the last number of years. Brazil is growing sugar cane on lands that used to produce beef. Argentina has imposed tarriff on beef to stop the price of beef increasing in Argentina.

The USA of considers that Agriculture accounts for 20% of GNP even though farming only accounts for 1-2% of same. At present in Ireland we produce the largest amount of infant formula than any other country. I wonder why these companies choose Ireland. I wonder if subsidity went and we could inject cows with hormones would these same companies stay in Ireland. If they left who would be the biggest loosers. Burgerking, Macdonalds etc all source most of there meat for the EU market in Ireland again if we were allowd to inject hormone's into our finishing cattle would these company's stay.

The reality is that most food inflation was not farmer caused until recently farm gate prices were static. What caused this to change. One cause was the change of payments from a production type payment to a farm based payment. This discourgaed farmers from producing unprofitable product. Along with this food now competes in price with energy. A ton of wheat is equivlent in energy to about 600L of oil ( i think I may have the figure wrong) however this year wheat sold for a good bit less than 200 euro/ ton. At present prices heating oil is retailing at about 85 euro/100L. Coal Turf and timber are more expensive than that. Can you imagine the price of food if people started to burn grain(completely feasible) instead of oil. Our greenhouse gas isssues could be reduced considerable. The average car burns about 11-1200L of oil a year. The average house ???1500L of oil and add coal and briquettes. How much oil/coal is used to produce the electricity that the average house uses.

The biggest agriculture product that is exported outside the EU is Dairy products.Mostly in the form of processed and semi processed foods. How many jobs are created by dairy companies in Ireland. Only about 12 months ago Kerry Group set up a food research faculity in Ireland. Over 1K good jobs will be created in this faculity. I wonder if Kerry Group was not an Irish company would it have set up this faculity elsewhere.

There is an old saying ''it take a small thing to make a bull fart''.

If subsidity's went who would the real loser's be Irish Farmers or Ireland inc.

There is another old saying ''be careful what you wish for''

dlouth15

Thanks for the reply, Farmer Pudsey, but my point was specifically about food security in response to another post by Good Loser.

If you take a product like beef which we produce an excess of, and a huge amount of our land is taken up with, how is subsidising it contributing to our food security? Surely from a food security point of view, we should be encouraging less beef production and more production of those products we currently import.

Farmer Pudsey

dlouth15 wrote: »

Thanks for the reply, Farmer Pudsey, but my point was specifically about food security in response to another post by Good Loser.

If you take a product like beef which we produce an excess of, and a huge amount of our land is taken up with, how is subsidising it contributing to our food security? Surely from a food security point of view, we should be encouraging less beef production and more production of those products we currently import.

It is EU food security that the EU commission look at not at Irish food security. Irish food security is not an issue.If a scarcity happened rain which a lot of which we grow goes towards animal feeds could be redirected for human consumption. The real issue is where we would ge it milled into flour.

These issue are like the chicken and egg story which comes first

dlouth15

Farmer Pudsey wrote: »

It is EU food security that the EU commission look at not at Irish food security. Irish food security is not an issue.If a scarcity happened rain which a lot of which we grow goes towards animal feeds could be redirected for human consumption. The real issue is where we would ge it milled into flour.

These issue are like the chicken and egg story which comes first

It is specifically at the national level that I'm saying the EU system of subsidy undermines food security in Ireland.

At the EU level itself, I'm not sure of the value of food security as in times of war bulk movement of agricultural products between countries becomes difficult. I think it is a bit of a red herring really.