Food companies, not farmers, receive largest CAP payments
Documents acquired under Freedom of Information reveal that food and drink companies are the biggest beneficiaries of CAP
It is multinational food production companies, not farmers, that receive the largest payments under the Common Agricultural Policy (CAP).
The ten recipients of the largest CAP payments in 2004 and 2005 are all large companies, mostly with extensive multinational operations.
Amongst them are the well-known alcohol brand, Baileys, and a Dutch company that buys Irish dairy produce for export outside the EU.
According to information revealed by the Department of Agriculture under the Freedom of Information Act, the Irish Dairy Board Co-op was by far the largest single recipient of CAP payments, receiving almost €134 million in 2004.
It was followed by Kerry Ingredients, a division of the Kerry Group, which earned over €46 million from CAP payments.
Kerry Ingredients last year had an operating profit from its worldwide operations, of which the Irish division is one component, of €256 million. The Kerry Group had €4.1 billion in sales worldwide in 2004.
Frank Hayes of Kerry Group said the payments were largely production aids for milk proteins, particularly casein, and that such production aids were "the EU's way of managing the marketplace". He said the payments were "indirectly" passed on to farmers in the "leading milk price" paid by the company to farmers.
Hayes said the amount for 2004 was particularly high because the EU had bought up a significant amount of butter into intervention that year. Kerry Ingredients earned over €18 million in CAP payments this year up to September.
R & A Bailey, producers of the Baileys liqueur, earned almost €6 million up to September 2005, placing the company fifth in the list of largest recipients so far this year. The company did not return calls for comment.
A Dutch company, Hoogwegt International, based in Arnhem in the Netherlands, was ninth on the list for 2004, earning almost €8 million in CAP payments. The company is an international trader in dairy products, exporting butter and milk powders which are bought on the international markets by companies including Nestle. Nestle has been accused of promoting powdered milk as a substitute for breast milk in developing countries.
Hoogwegt had a turnover in 2004 of €1.8 billion. A spokesperson for the company said the CAP payment was "not a subsidy for my company, it's a subsidy for the Irish farmer". "The internal market prices (in the EU) are higher than the external prices, and to bridge them, you have subsidies", he said.
One of the top ten refused permission to the Department to release any information on it; according to the other figures, this company earned in the region of €7-10 million in CAP payments in 2004.
CAP's big beneficiaries
Total CAP payments distributed by Department of Agriculture 2004: €1.6 billion
Total CAP payments to ten largest recipients: €287 million
Top five recipients 2004
1. Irish Dairy Board Co-Op: €133.8m
2. Kerry Ingredients Ireland: €46.8m
3. Glanbia Ingredients (Ballyragget): €31.2m
4. Bailie Foods Ltd: €17.7m
5. Glanbia Ingredients (Virginia): €13.7m