Almost all of politics obscures a single, central, inescapable fact: Money does not come from nowhere. Someone always pays.
This is even true of the one institution that can create money out of nothing: Central Banks. When they print money, the laws of supply and demand push the value of money down, creating inflation. So, in the end, you pay.
This principle also applies in business, and it has bugged me now for two weeks in relation to the story of Bord Bia and angry Irish farmers.
A great many people in Ireland, mostly from the farming lobby (to which I have close familial ties) wish for the Chairman of Bord Bia, Larry Murrin, to stand aside. He is charged – in the court of public opinion – with hypocrisy, because his public job is to promote Irish food, but he is also the Chairman of a privately held company that has been “caught” importing Brazilian Beef instead of buying Irish. Dawn Farms say the amount is miniscule – just 1% – but farmers say the principle is enough. How can you promote Irish while buying Brazilian? It’s the kind of question that is easy to pose and hard to answer.
All of this is well and good, but it poses an obvious question: Who pays?
One of the central reasons that the Irish farm lobby opposes Brazilian Beef is that it is cheaper than Irish beef. The reasons for this are part regulatory, and part economic. We need not go into them here. We need only accept that as things stand, Brazilian Beef is cheaper than Irish Beef.
It is therefore the position of Irish politicians and parts of the farm lobby that Dawn Farms has some kind of moral responsibility to choose the more expensive Irish product, in order to support Irish farmers.
But surely Dawn Farms also has other responsibilities? It also has a duty to its customers to ensure that they are not paying needlessly high prices. Which is why, I presume, that the Farm Lobby is focused on producers and not consumers: The IFA knows that its messaging would be less effective if it was out there telling cash-strapped consumers doing their weekly shop that they have a moral obligation to buy more expensive burgers just because they are Irish.
The company also has a duty – whether we like it or not – to its shareholders. Assuming that it bought more expensive beef and kept prices the same, then that money would have to come from somewhere, and the obvious source is profits and profitability. So, is the IFA’s position that people who run meat companies have a moral – though not legal – duty to make less money in order to buy a more expensive product?
I am not asking these questions to be flippant. I am asking them because it seems to me that the rage against Bord Bia and Larry Murrin is misplaced: The problem afflicting Irish Farmers is that their product is too expensive relative to other producers internationally with access to the Irish Market. They cannot expect people to voluntarily choose a more expensive product simply out of patriotism. Having grown up on a farm background myself, I can’t think of many farmers who would buy more expensive Irish gear over cheaper imports if it affected their own bottom line. It is unfair to expect it of others in turn.
No, Dawn Meats is the symptom afflicting Irish farming. It is not the problem.
The problem is that for years the bodies representing Irish farmers have gone along with a regulatory framework for farming that has driven the costs of farming ever higher. The main driver of these higher costs has been climate policy and enormous compliance costs imposed on Irish farmers in terms of upgrading equipment and buildings and slurry practices in order to minimise carbon emissions.
Farmers, somewhere along the line, appear to have made the mistake of believing that these regulations were introduced in good faith as an attempt to make Irish farming cleaner. In fact, the objective of those who introduced much climate regulation to Irish Farming was to wipe it out: Those who wanted a cut in the national herd accomplished by regulation just so happen to be achieving it by making Irish farming economically unviable: All in the service of reducing global emissions by less than a thousandth of one per cent.
I feel then, for Mr. Murrin, who has made the mistake of presiding over a company that makes good business decisions, and is therefore incurring the entirely misplaced anger of farmers. Farmers this week occupied Bord Bia’s offices. That is arrant nonsense: They should be occupying the Green Party’s Offices, and Fine Gael’s, and Fianna Fáils. They should be occupying the offices of the European Commission.
Why aren’t they?
In part, because the IFA has gone along relatively peacefully with every new regulation designed to drive up farming costs. Now it rages against Larry Murrin.
Irish Farmers, frankly, deserve more competent leadership.