Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

This is my first time to attend a committee meeting in the Houses of the Oireachtas and I am delighted to have the opportunity to be here. I wish the Chairman and Minister well in their new appointments.

Before I refer to programme A, I wish to make a point about the Minister's opening statement in which he referred to the importance of improving profitability at farm level. Unfortunately, the current reality is that there is no profit level to improve. Most farms are making a loss. We talk about volatility, but we have seen no volatility in most sectors for a while now. All of the pressure is and has been downwards. My understanding of volatility is that it is a trend that goes up and down. Unfortunately, all we see is farm incomes moving downwards.

Have the powers that be realised the extent of the crisis in the dairy sector? There has been considerable investment in the past two to three years. There is no point in my throwing stones at people, but I must state no one saw the dangers of increased production in northern Europe and the damage it would do to prices. As a country, we need to start taking a serious look at ourselves. We have been brainwashed into thinking we are the most cost-competitive producers in Europe, if not the world, but the reality, as I see it, in grain prices is such that we must stand back and ascertain how competitive we are by comparison with the rest of Europe. The grain sector and the prices that will be received are another issue, but I do not know how grain farmers are managing to exist, given the price grain is making. It looks like there will be another bumper harvest in Russia. Given current prices, it appears that Germany and what I call the feed lodge units on the Continent are pushing yields to a great extent. They are milking two and a half to three times a day. They have Holstein cows with considerable yields. The producers have a small margin per litre, if there is any margin at all. We see it in the pattern of production. The downward pressure on price is not curtailing production anywhere around the world to any serious extent. Unless production levels are brought back, the Irish dairy sector as we know it will not survive.

I have had three or four men on to me in the past month who have been put under pressure by banks to sell land parcels. This is June 2016 and we must have a recovery in 2017, but no one can see any possibility of a recovery, unless production levels drop by approximately 4% to 5% worldwide and there is no indication that there will be that kind of drop. We talk about a work programme for the committee. Farm profitability has to be top of the agenda and the message has to be hammered home at every opportunity.

I worked with the Minister when he was on a different side of the table. I accept that he has a good understanding of farming and comes from an area that is experiencing severe income difficulties. He referred to the beef sector and said one should not talk down prices. We do not have to talk down prices; it is being done for us by processors. We are still in the month of June when prices should be peaking, but already factories have started to pull prices. I sold cattle this weekend and they are talking about weight and age restrictions. Cow prices are down by 10 cent to 15 cent per kilogram in the past ten days. Cow prices have always been the barometer with which one can judge beef prices. The UEFA European Championship is taking place. It always creates a good market for manufacturing beef. The Olympic Games are coming up in Rio de Janeiro. Even with all of these positive scenarios, the factories are in the month of June already starting to reduce prices.

The harsh reality is that we have extra cattle during this back end. Unfortunately, as dairy farmers try to bring some income through the farm gate, there will be extra cow cullings. I am not trying to talk down beef prices but they are not at an acceptable level and they will drop. We just cannot ignore that scenario. This will put significant pressure on an already pressurised sector.

With regard to live exports, we have heard of markets opening here and there, but there are no cattle moving. There was an announcement on Turkey a week or ten days ago in respect of lighter cattle. We have heard about access to markets being announced for the past 12 months to two years but, unless we see cattle moving, beef farmers will not have confidence. I obviously welcome the opening of markets but, unless there is movement of stock, the problem will not be solved. The recently announced Turkish market will not do anything for the crisis approaching this back end. Unfortunately, once the kill goes over 30,000 heads, the factories will do what they always did and try to trample farmers into the ground, as Deputy Penrose implied.

I question the commitment of Bord Bia to the live export trade. I was a member of Bord Bia for six years and sat on the board. I question whether it has real commitment to the live trade.

Profitability at farm level must be the paramount concern of this committee. If one were to talk to farmers about Harvest 2020, Food Wise 2025, increased production, increased export levels and the benefit of agriculture to the rural economy, one would want to be very near the door. With the income pressure currently on farmers, one would want a very good life assurance policy to be doing it.

With regard to the section the Chairman wants us to focus on, I welcome the ring-fencing of the €300 million for the beef genomics scheme. We should reopen it. There was a lot of bad press at the time in question. Beef farmers now see that their neighbours are able to access the scheme. If it were reopened, more people would apply. Any money that can be brought into that sector must be welcome. I thank the Minister for saying he will do his best to spend the money over the lifetime of the plan.

My final question relates to the horse and greyhound racing fund and the discussion on the sale of Harold's Cross and the potential this has for Bord na gCon to reduce its debt. If that sale does not go ahead, what will be the implications for the budget of Bord na gCon?