Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

Thank you, Chairman, for holding this meeting. People were anxious that we meet last week, but it was not possible to do so. One of my problems is that I do not have the power of bilocation. This week I have been in Luxembourg, Brussels and Dublin, which has been difficult. I, therefore, thank the committee for its patience.

This is a serious issue, on which we need a significant response from lots of stakeholders and players to deal with a drastic shortage of available roughage fodder for animals. We have a national herd of approximately 6.5 million animals. We have just over 1.1 million dairy cows and 1 million suckler cows. We also have other animals that need roughage. It might be helpful for me to outline what we have been and are doing. If members have questions, we will try to deal with them.

There has not only been a response in recent weeks. We knew from last summer - we really did not have one - that we would have a difficult winter period in feeding animals. It was going to be expensive for farmers and there was a risk that there would be a fodder shortage. Throughout the winter months we ensured Teagasc would be prioritising fodder, feed and nutrient management for livestock. That was done in partnership with all of the farming organisations which have shown much leadership in this regard. Many farmers were anticipating managing a limited fodder supply up until a couple of weeks ago when everybody had assumed we would have a normal spring. If one looks at the statistics, for example, in the case of a big co-op such as Dairygold, at the start of last week 5% of its farmers had run out of stored fodder. By the end of this week the figure will be 50%. That is how dramatic the problem has become. Everybody had timed his or her usage of stored fodder and its availability to end about one week ago. There is now a significant shortage.

We are trying to do a number of things. First, we recognise that there is stress among the farming community, given the fear that farmers will not be able to feed their animals. For many of them, it is a little like not being able to feed one’s children. The relationship between many farmers and the herds they manage is incredibly strong. That is why when animals are screaming for feed and farmers cannot provide it, it is a particularly stressful time. Farm organisations have been strong on the issue and we have instructed our inspectors to be much more sensitive in how they inspect farms and deal with farmers for the next two to three weeks. We cannot simply stop inspections because we have an obligation to ensure monitoring takes place, but farmers will see a very different attitude in recognition of the prevailing stress levels.

One of the things that always adds some positivity in agriculture and farming communities is if payments are made ahead of schedule. At this time of year we would normally deal with 100 AEOS payments a week, but last week we dealt with 800. More than €500,000 was paid out last week and in the next ten days €2.5 million will be paid out through the AEOS. Ordinarily, these payments would be spread over the next month to six weeks, but we have people working around the clock to make the payments. Even complex cases are being paid. Unless there is a real reason to do so, there will not be a delay. There is a helpline for the small number of farmers who have no feed and no money to buy it.

I will discuss the availability of credit in a moment because there has been much discussion on this issue with banks, co-ops, grain merchants, feed merchants and so on. There is a helpline in place and there is no reason for any animal in Ireland to be starving at present even though there is a shortage of feed. A farmer who has no money to buy feed or who cannot access feed must contact the Department and we will pay to feed their animals. Obviously, while this is a farmer support measure, it is primarily an animal welfare fund. Members of the public who are concerned about the state of animals they have seen or heard also can ring the helpline and we will investigate it. The number is 1850-211990 and there have been 117 calls to that helpline thus far this year, of which 48 have related to fodder and practically all of those calls have been within the past week. The Department is dealing with this problem in a confidential way, farmer by farmer and case by case. It is trying to ensure the welfare problem resulting from a fodder shortage is addressed and this probably means accessing feed from the co-operatives that are bringing it in and delivering it to those farmers who have a dramatic requirement for feed quickly. A fund is in place that can be used for that purpose and I can add to it, as needed. In my view, this is a demand-led fund as opposed to a fund about which I propose to give an actual figure. Farmers who need help, if their animals are starving and they cannot get feed to them, should ask for help and my Department will give it to them.

The second point is that in the immediate term, what farmers need is not money but feed. All the farming organisations will make that point and any farmer I have spoken to - I have spoken to many - will state that what they need at present is access to fodder and not a fund. While everyone likes to have money to give out, in respect of the immediate crisis, what is needed is large volumes of roughage, namely, hay, haylage and silage for farmers or, in limited circumstances, straw as a temporary measure to get over a hump. However, what really is needed is hay and haylage and in consequence, the agricultural infrastructure in Ireland, led by the co-operatives, are importing very large volumes of hay at present. For example, Dairygold is bringing in truckloads of very large square bales at present. Each truckload has 20 bales and to put that into perspective, each bale is equivalent to approximately 38 small bales. Each such load will feed approximately 2,500 cattle for a day. While I do not have to hand the exact figure, between 85 and 90 truckloads have come in thus far, which is sufficient feed for 234,000 animals for a day. Another 150 truckloads are planned by Dairygold, which is bringing in between 25 and 40 truckloads every day, depending on the systems it has in operation. It is dispensing these loads between its different co-ops around County Cork and parts of counties Limerick, Kerry and Clare. Moreover, Dairygold is not alone in this regard. For example, a smaller co-op, Drinagh Co-operative in west Cork, was the first to start importing hay. Others also are doing it now, as Glanbia has really kicked into gear, as have Kerry, Lakelands, Connacht Gold and Wexford. I met all the chief executive officers of the co-operatives yesterday and they all have agreed to increase dramatically the importation of large volumes of hay. They will import it from the United Kingdom if they can get it there but if they are obliged to go further afield to other parts of Europe, they will do that too.

Consequently, farmers need to know there has been a significant response. This has never happened before in living memory. I can never remember this country being obliged to import large volumes of fodder from the United Kingdom. While this is not a political statement about what is happening elsewhere, if one was watching the television station BBC Northern Ireland last night, one would have seen that a fodder crisis also is being spoken of there. Moreover, people there were talking about following the example of the Republic in terms of how we are responding. While we are doing a lot, we of course may need to do more, which is the reason I seek feedback from members. However, this week I have recognised that to feed their animals, many farmers will be obliged to buy imported hay, which is expensive. The Department has committed to covering the cost of transporting this hay to enable them to buy it at normal prices, if you like. For example, Dairygold is bringing hay all the way from Kent, which is the other side of England. It is an eight-hour trip to bring this hay to a port in United Kingdom to bring it across to Ireland. Moreover, it is costing €150 to bring into Ireland those big square bales. They are being sourced for €75 and it is costing €75 to transport them here. Consequently, for a farmer, it is costing €150. The Department is paying a large portion of the transport costs in order that farmers will be able to access those bales at approximately €100 per bale. The reason it is not the full €75 is we must ensure the setting up of a system that encourages co-ops to drive the hardest bargain possible in respect of the cost of transport, for obvious reasons, as we do not want people to be profiting from this fodder crisis. I have committed to spending €1 million, essentially to ensure a reduction in the price of hay that is being imported for farmers of between one third and one half. In many cases, the price will be reduced by one half. As many people have questioned the reason only €1 million has been committed, I note this will buy 1,000 truckloads of hay, which is enough to feed 2.6 million animals for a day. These are the kinds of volumes under discussion. If we get to a point at which more than 1,000 truckloads of hay come in from United Kingdom and we need to consider whether the scheme should be extended, then we will do so. However, it is neither helpful nor necessary for me to start talking about more money. The issue is not money; it is logistics. It pertains to getting large volumes of fodder from the east coast of England to points all over Ireland and using the infrastructure we have in our co-ops, which covers every parish in the country, to get that fodder out of farmers and to manage this in a way that farmers are accessing it as they need it but are not over-accessing it, because other farmers will need it.

I reiterate, we had a really good meeting yesterday with the chief executives of all the co-ops and to give members an example of how seriously they are taking this issue, Stan McCarthy from the Kerry Group flew in from Chicago for the meeting. Moreover, all the other key co-ops also were represented. They have committed to ramp up significantly their efforts to bring large volumes of fodder and have agreed to an initiative on fertiliser because ultimately, this problem will be solved by growing grass and not by importing fodder indefinitely from the United Kingdom. At present we have a big problem because many farmers out of necessity have put animals out on wetland they normally would be saving for the first cut of silage. Cattle actually are trampling good grass into muddy ground, which has all sorts of negative consequences in terms of the availability of grass later on in the season and of silage for next winter. Moreover, it is not overly-nutritious for the animals either because they are grazing too early before there is any real swarth there. Therefore, both the Department and the co-ops are encouraging farmers to buy and to use fertiliser more extensively than they may normally do at this time of year, to try to get a real injection into the system to try to catch up, because the grazing season is approximately five weeks behind. Co-ops will make available interest-free credit for farmers next month for fertiliser purchases. They will extend credit facilities for farmers for fertiliser purchases, obviously within limits, to try to get an injection of grass growth into the system. Thereafter, let us hope we will get the weather to actually deliver on that but we must always plan for the worst. Were we to get another summer like last summer, we would have a continuing fodder crisis, even with some grass growth. Consequently, the Department is planning for this to such an extent that it now is talking to co-ops about bringing in more hay than is required for the next two to three weeks, which is the crisis period. The idea is farmers not only will buy enough roughage to feed their animals during this shortage but, even when grass is up and growing through the summer, enough will have been brought in to enable farmers to put some into storage as well as a security measure.

The co-operatives agree on that and they are buying into it.

In relation to banks, I also met all of the key decision makers for all of the Irish banks that are lending to farmers - AIB, Bank of Ireland, Rabobank ACC and Ulster Bank. They all were in yesterday and we had between an hour and two hours of a discussion. If one looks at the statistics on banking and farming at present, what is happening is quite revealing. For whatever reason - I have a fair idea what is the reason - farmers are not going to banks to deal with their credit problems. There are serious credit issues for farmers. There are very good prices, in terms of beef and milk. These prices are getting stronger and there is no reason this year cannot be a reasonably good year for farming, despite the really bad start. Banks want to lend money to farmers. They are confident that they will be able to get their money back. They want to make flexible credit facilities available to farmers. They are talking to me about facilities, for example, of making short-term loans available to farmers and not asking for any repayment until harvest time or until the single farm payment comes in. That is the kind of flexibility that they are happy to show to farmers. I want to hear from farmers whether this is merely talk or whether it is happening. For example, Ulster Bank has made €25 million available for a weather-fodder fund - €15 million of it in the autumn and another €10 million this spring - and the bank is saying the farmers are not accessing it. They want to make short-term loans available to farmers - an average of €19,000 was the figure given. They want farmers to come in and draw down that credit. Likewise, Bank of Ireland, AIB and Rabobank all have specific teams in place that they want challenged by farmers. If farmers are not getting the treatment they need, I need to hear about it and I will take an aggressive line for those farmers with the banks concerned given the kind of assurances that I have been given by senior staff in all of those banks. In terms of credit, there is a banking system ready and waiting. One cannot say the following about any other sector in the Irish economy, that banks want to lend to them. They are publicly stating that they want to lend into agriculture and farming.

If one looks at the statistics on farming in Ireland, half of farmers in Ireland have no borrowings at all and the others have by and large viable businesses. What we need to get over this particularly difficult period is access to credit at affordable rates with sensible repayment scheduling and from what I am being told, that is what banks want to provide.

There are other credit facilities available to farmers as well. On the co-operatives, for example, the largest co-operative in Ireland, Glanbia, has made an extra €15 million available to their customers this year. Connacht Gold has done something similar. It would not be quite as much because it would not have as much lending. At Dairygold, it is somewhere between €10 million and €15 million. The others are all the same.

Some of the co-operatives are giving interest-free credit because they want farmers feeding their animals and buying fertiliser to get grass growth because without the farmers doing so, they do not get the milk that they need. This is a commercial decision as well as a compassionate one. This is the big advantage of having a co-operative system in Ireland that can pull together in the interests of farmers, which is what is happening now.

There is significant credit available and there will be more in co-operatives, there is significant credit available that needs to be tested and drawn down within the banking system and there is credit available from feed merchants as well. In some cases, there are examples of farmers being charged significant interest for credit and there is no reason that should happen given the offers that have been made from the banking system and the co-operatives. I would encourage farmers to bear that in mind.

I do not want to pretend that, because of all that is being done, everything is okay here. It is not. Many farmers are extremely stressed and worried as to what the future holds for their animals. There are farmers selling animals because they cannot feed them. There has been a significant increase this year in the number of animals dying on farms. On the figures as they compare to last year, by the end of March, the date for which I have data, last year 83,000 animals died on farms in the first quarter and this year the number is 106,000. One needs to put that into context. There are 130,000 farms in Ireland. These are not figures on starvation. These are calves that are dying at birth. There is also a 3.5% increase in the number of calves in Ireland this year. Of course, the figures also relate to animals dying because they are not getting the nutrients that they need and, therefore, they are picking up infections, diseases, etc. There is an issue here.

There is a precedent. After 2009, which was the previous really bad year for farming, there were similar figures for deaths on farms to what there are at present but if one looks at 2010, there was a dramatic improvement after that, and we can deliver that improvement as well this time. The challenges are different from those of 2009, particularly from a fodder availability point of view, but if we can get over the next three weeks, this can be a year in which farmers can make their repayments and can make profits because prices are strong.

I am open to questions or suggestions. Obviously, we will consider suggestions. My focus, in terms of the money that we spend, is on getting fodder into farmyards to feed animals, not committing large amounts of money for a compensation fodder scheme or something like that. I heard calls for a €10 million fodder scheme. If we were to introduce a €10 million fodder scheme, we would have to do a number of things. First, we would have to take it from farmers from somewhere else because there is no new funding. Second, we would have to put a scheme in place for which we would have to get approval from the Department of Finance and the European Commission. We also would have to put a system in place to allow farmers to apply for those funds and we would have to put the necessary checks in place to ensure that everybody who applies qualifies under a certain criteria, in other words, there would be no payments being made until July or August at the earliest when, hopefully, we will have left this fodder crisis behind us. Instead of focusing on such a fodder scheme and all of the complexities and approvals around it, we have focused on turning around a targeted transport subsidy scheme - we turned that around in 48 hours in the Department - because that is what farmers, farming organisations and co-operatives were asking for. It is about making feed available in a crisis as opposed to making some grand gesture in terms of committing large amounts of money, which, essentially, I would have to take from some other sector within agriculture to pay for. We are dealing with the crisis at hand which is about getting feed from the United Kingdom into Ireland and making that available to farmers at an affordable price and in the quantities needed. We want to go beyond the crisis need to provide extra fodder so that we can settle the nerves for the rest of the summer in terms of the fodder issues. We are also focusing on ensuring that farmers can manage their finances and their credit through this awkward period where there has been an expensive winter which, hopefully, will be followed by quite a profitable summer and autumn because of the good prices to ensure that the credit and financial management around this year can work for as many farmers as possible.

Once again, if there are farmers who feel that all that is happening is just too much for them, then they need to call us and we will help them. They should not let pride get in the way of that. There is a lo-call number that I have given out on many occasions over the past couple of days, 1850 211 990, for them to do that.

That is what we are doing. If the members want us to do more or if they think we should be focusing differently, they should let us know and I will try to respond to that as realistically as I can.