Mr. Eddie Downey:

I am sure that given the interest of members in their own counties, they will support the proposals we will be making today.

A study conducted in 2013 by Professor Alan Renwick from UCD showed that, due to the multipliler effect, for each €1 of output produced on sheep farms, an additional €1.33 of output was generated in the economy and that each €1 of support for the sheep sector underpinned a figure of €2.70 of aggregate output in the economy.

Total sheepmeat production amounts to 58,000 tonnes per annum, and Ireland is the third largest exporter in the EU with exports of 46,000 tonnes. Our main markets are France, the UK, Belgium, Germany and Scandinavia.

There are eight key meat plants involved in processing lambs for export and a larger number of small abattoirs servicing the domestic butcher trade. Lamb consumption on the domestic market accounts for about 15,700 tonnes with retail sales valued at €102 million.

Incomes on sheep farms are challenging and direct payments are hugely important in helping to maintain viability. The Teagasc 2014 National Farm Survey shows an average sheep income of €14,551 or only about 44% of the average annual earnings.

The sheep sector has not fared well in previous CAP reforms. In the original MacSharry reforms, the ewe premium system strongly supported incomes and drove numbers, which increased from below 2 million ewes in the late 1980s to almost 5 million in the 1990s.

Under the Fischler reforms with the move to decoupling, ewe numbers declined rapidly again dropping back to 2.2 million. The IFA worked hard to get support for the sector and various initiatives were undertaken to stabilise numbers, including the Malone report and the introduction of €18 million under the sheep grassland payment, financed from unused CAP funds.

The sheep grassland payment scheme was cut in the 2012 budget down to €14 million for 2013 and €3 million was transferred to the sheep technology programme, or STAP scheme. Payments at farm level reduced from about €8.50 per ewe back to €6.35 per ewe on a maximum of 210 ewes.

In the most recent CAP reform there were no specific policy elements agreed for the sheep sector either under pillar 1 or pillar 2, unlike the beef sector where the suckler beef genomics scheme from the pillar 2 RDP was introduced. This is worth €52 million per annum to the beef sector.

As part of the current CAP reform, the IFA lobbied strongly for a coupled payment for sheep, which was rejected by the Minister, Deputy Coveney, and his Department. Instead, the Minister incorporated the sheep grassland payment into the single farm payment of sheep farmers and increased its value to €15 million through unused funds and modulation. However, we now have a situation where we do not have a targeted sheep-specific payment that will support and develop the sector.

I would now like to hand over to our national sheep chairman, John Lynskey, to go through the finer detail of these proposals.