Aideen Sheehan has a piece on food prices in today’s Irish Independent reporting that prices of some popular branded foods have risen by 7% over the past 8 months compared to prices in a survey conducted by the National Consumer Agency last summer. However, the real story in recent months has been the remarkable stability in food prices despite soaring commodity prices on world markets.
David McWilliams discusses the Irish version of the ‘Gavyn Davies’ sector financial balances graph in the Irish Independent today. He makes two points. The first is to highlight the restoration of the foreign sector balance in recent years, which he interprets as meaning that, absent the banking crisis, the government would not have needed to seek EU/IMF funding given the availability of sufficient domestic savings to fund the government deficit.
His second point is that the chart shows that austerity will not work because, if the private sector keeps saving, then either the government deficit remains high (as a result of a further contraction of the economy) or there is a build up in the current account surplus on the balance of payments, which he also sees as undesirable because it means that “we will export capital to the rest of the world for them to use, while projects in Ireland are starved of capital”.
While the first point may be true in the sense that the state would not have faced the downgrade on its sovereign debt in the absence of the banking crisis, I think the second conclusion is wrong.
The CSO has just released the 2009 results of its annual Survey of Income and Living Conditions. SILC is the official source of data on household and individual income and also provides a number of key national poverty indicators, such as the at risk of poverty rate, the consistent poverty rate and rates of enforced deprivation. The accompanying press release highlights a number of the key findings.
I have been amazed by the media spin put on the European Court of Auditors’ report into the implementation of the EU’s sugar regime reform in 2006. This reform resulted in Greencore deciding to close the only remaining Irish sugar factory in Mallow, thus signalling the end of beet-growing in this country. The reform cut the price of sugar beet by 36% while removing 30% of the EU sugar production quota over a four year period. It is simply not credible to suggest that the Irish industry could have survived in this new environnment.
A couple of weeks ago the Joint Oireachtas Committee on Enterprise, Trade and Innovation released a report on increasing employment opportunities in the Agro-Food sector, prepared on the basis of a rapporteur’s report by Arthur Morgan, T.D. The report was prepared before the release of the Food Harvest 2020 report by the Department of Agriculture and Food in August this year, but it provides a useful comparative perspective. As befits this Oireachtas Committee, the focus is more on the food industry than on primary agriculture. The issues raised were informed by a survey of agri-food enterprises which the Committee conducted.
Some of the Committee’s recommendations are a bit off the wall, such as the proposal for an all-Ireland Economic Committee of parliamentarians to agree on the convergence of Corporation Tax, Excise and VAT rates in both jurisdictions. It dismisses the importance of flexibility in wage rates despite recognising that the food industry, in particular, is very exposed to exchange rate fluctuations given its dependence on the UK market. However, three of its recommendations are worth highlighting.