Food Price Inflation: Farmers Warn of Long-Term Increase
Food Price Surge: Farmers Blame Politicians for “New Normal” of Higher Costs
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Dublin, Ireland – Farmers are expressing frustration with politicians who they say are out of touch with the realities of rising food production costs, warning that current price increases are not a temporary spike but the ”new normal.” Denis Drennan of the Irish Creamery Milk Suppliers Association (ICMSA) criticized politicians for expressing surprise at food price surges while simultaneously enacting measures that directly contribute to higher costs for farmers and processors.
Politicians Criticized for Ignoring Farming Cost drivers
Drennan told The Irish Times that it was “more than a little irritating” to hear politicians express concern about food prices when they have “no problem at all voting through measures often directly responsible for heaping up higher costs on the farmers and processors producing that food.”
he highlighted that current regulations fundamentally dictate the cost of farming. “What’s really irritating – certainly from ICMSA’s view – is the implication that, somehow, the farmers should have absorbed the increased costs out of our income, out of our margin,” Drennan stated.
He cautioned that the price increases consumers have experienced are not a temporary “price spike” or aberration but represent the “new normal.”
The Cost of Mandated Standards
“Getting the food of the mandated standard to the fridge of your local supermarket has a cost - economically and environmentally – and that cost has to be paid,” Drennan emphasized.
He criticized a decade-long “fantasy” where consumers were led to believe that the transition to low-emissions farming and primary food production,with its associated astronomical expenses,would occur without any change or cost to the consumer. “We now see the consternation when consumers realise that, actually, everyone is going to have to pay more for the new system,” he added.
Drennan also pointed to data suggesting that previous generations spent more than twice what current generations are spending as a percentage of average family disposable income. “Irish consumers are not overpaying now; the data suggests they’ve been underpaying for decades and are only now starting to get a glimpse of what their food really costs,” he concluded.
Retailers Point to Upstream Costs and Competition
Arnold Dillion of Retail Ireland, the Ibec umbrella group representing supermarkets, stated that grocery retail margins are low and that recent price increases are “overwhelmingly due to cost increases further up the supply chain.”
Despite inflationary pressures in some categories, Dillion noted that “Irish food inflation trends remains below the EU average.” He referenced a 2023 report by the Competition and Consumer Protection Commission (CCPC) which found the Irish grocery market to be “highly competitive.”
dillion asserted that the Irish market is characterized by tight profit margins, with pricing decisions primarily driven by external cost pressures. He added that publicly available financial data confirms that Irish grocery retailers are not earning abnormal profits and are operating in full compliance with legal and regulatory standards.