Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

It is very interesting. I thank both ICOS and Positive Farmers for their contributions. We will take a lot away from what was said here today.

I will address the second submission first. If I understand the delegates correctly, they are saying we should keep the input cost down and focus on profit rather than production. One will not have any final choice; one can hedge one's bet on the sales price but one does not have final control over that since markets will be volatile. One will not have any control over the external input costs. All one can do is try to reduce the external input cost by focusing on grass.

Over the past two or three years, I became fascinated by a certain phenomenon that I encountered by accident. I went down to Cork where people started complaining about being undercut in the liquid milk market. The complaint was that the milk was coming in from Northern Ireland. Not being very familiar with the dairy sector, I was a little taken aback in the beginning until I understood what had happened. Effectively, the quotas disappeared in 1995. One would think it would be easier to grow grass in the south of Ireland than in the North as there is a longer season and more grass. Therefore, I could not understand how the prices could have been worse in Cork.

I am interested in hearing whether the delegates believe I am correct in my analysis. When the quota was introduced in the North, farmers increased production considerably. That, in itself, forced prices down somewhat, particularly in the liquid milk trade as the milk must be got rid of. They opted for very dear systems. Do we have evidence that the margins in the North went down? Logic would ordain they had to go down. One cannot have a dear system without an effect on the margin. This is certainly the case in the liquid milk market, which is at the lower end of the market. Irrespective of how much one increases quantity, one is left in a more vulnerable set of circumstances. Although one might sustain one's profit by producing a greater quantity, is the delegates' message that one is more vulnerable to shocks, including those associated with health and price? If that is the case, we should consider the Northern Ireland situation, in particular. The phenomenon is somewhat akin to what happened in New Zealand, but that occurred on a mega-scale. If what I describe happened right here on this island, we have a lot to learn. I am certainly getting a clear message from the delegates today that farmers should increase grass productivity and keep the cattle on the grass for as long as possible. If I understand the delegates correctly, they are saying the grass element should amount to 75% while the remaining elements should be reduced to 30% or 40%.

I call food production with a narrow margin and a vastly increased amount of production "treadmill farming". One is doing a lot of cycling but not going anywhere or gaining. I am worried that while the industry and Ireland Inc. want an increasing amount of product in order to have more sales and, consequently, more money coming into the country, there is a danger. I worry that the uninitiated, inexperienced or people who always chase the money when told where it will be, or those who always chase the rainbows, will get drawn into this and become victims of what should, in the longer term, be a good story for those who are experienced, have their costs right, know what they are doing and have a high level of productivity without losing the run of themselves.

With regard to investment, the delegates are saying one should invest and focus on profit and safety. A sad lesson we learned last week is that 58% of fatalities on farms occur on dairy farms although they comprise only 17% of farms. Therefore, farmers should invest in safety. Having a safe farm adds to profitability in any case, and it is normally more efficient. There should be more focus on profit than production. I presume the delegates will refer to the need to focus on inputs, such as grass, rather than getting gold-plated equipment or milking parlours.

Some of the points the Irish Dairy Board made are the same as those made by the delegates today. On seeking a resolution to the superlevy issue, I understand the Minister is saying it cannot be done. Are the delegates saying that, as an Opposition spokesperson, I should be telling him to go back and try harder? Do they believe it is not a dead letter and that it is possible not only to obtain a deferral but also a butterfat adjustment or some kind of write-off?

My second question for ICOS, which is a fair one, concerns whether there is any way of reducing the superlevy fine by storing milk on the farm or elsewhere so it may not be purchased by the co-operatives until 1 April, rather than in the last week of March.

By how much could the superlevy be reduced if milk could be held back for a week or two? What is the rule about when one has to buy the milk? Could Mr. Keane's organisation store the milk for the co-operatives?

I am interested in what Mr. Keane said about volatility management. A proposal on tax was put by the farming organisations this year, and I think that is an issue for the future.

With regard to preferable access to the Chinese market, do the witnesses believe that enough is being done at European level to get into China without any of the import tariffs?

When everything went wrong in the economy and people could not get credit, and good projects could not get funding, having worked both as a co-operative manager involved in agriculture and in industry I began to wonder whether we had made a classic mistake in selling the ICC and ACC banks. Whether it be a co-operative bank or a State bank, is there a need for small, industry-specific banks that would not deal with property or anything like that but focus just on productive industry and agriculture, as did the ACC in the past and the ICC in terms of industry? If there was a bank with, say, €2 billion capitalisation, and it need not be very big, we might be able to hive off part of AIB into it because we own it, and we should not be in a hurry to sell it. Do we need specialist banks that know the industry and can take the approach the witnesses are talking about? I agree that the number one priority is the person. I do not care what one goes at in life. I often point to the fact that a good friend of mine who has a degree in Celtic studies has one of the only knitwear factories left in Ireland. The only difference is that it is located on the Aran Islands because he became very skilled and kept upmarket. Logic would tell one he should have closed down a long time ago but he is doing very well. He is hugely successful because he changed with the markets. He focused on the high end of the market and one can only buy his product in the dearest places. However, that success was to do with the creativity of the person and their project, not the location. Is it more likely that a specialist bank would adhere to the criteria the witnesses spoke about rather than general high street banks that are trying to deal with 1,000 different types of industry at the one time?