Mr. John Comer:

It has been circulated already. I have highlighted the problems in the dairy sector and I might refer to solutions later. We are most concerned about the beef sector also and the increasing numbers for 2017 according to the CCMS. We must put a plan in place. Competition is critical. An emphasis must be placed on competition by way of live exports. There is a responsibility on Bord Bia and the Department of Agriculture, Food and the Marine. We have heard about the US and Chinese markets being opened but there is no real evidence of that. A further push is needed for ground beef in the US and, in terms of the fifth quarter, that goes to China.

The effect of Brexit is more pronounced in rural areas and the agricultural scene than in the rest of the economy. We must deal with the outcome of that democratic result. To date, the response here has been tardy at best. There is a lack of structure to the approach. Ireland is one of the most exposed member states in Europe and the rural economy is the most exposed sector in this country. We need to talk about the situation in terms of the UK versus the EU. What suits the rest of the EU will most likely not suit Ireland because it is different to other member states. The fact is that the UK put €18 billion into the coffers of the EU and got €10 billion back, which left it with a deficit of €8 billion. The way the deficit was justified to the taxpayers in the UK was by virtue of its access to the Single Market. The Single Market was roughly valued at €8 billion per year. It will not suit the other governments in Europe to allow the UK free access to that market. If a tariff is put on trade between Ireland the UK - or, more correctly, between the European Union and the UK - but it will affect Ireland most. We will be in trouble. We must recognise that and put serious plans in place to deal with the effects of Brexit.

I will return to how we mitigate against volatility in the dairy industry. I have no doubt the dairy industry will recover but I do not want that to happen at the expense of farmers across Europe going broke. Unless plan is put in place, that is exactly how the free market will work. There was euphoria when quotas were lifted on 1 April 2015. The situation was hyped up. The ICMSA was not opposed to the quotas being lifted, as we were not in favour of them. The quota system was a lazy tool that was not fit for purpose. Ultimately, quotas became redundant and we were delighted to see them go. However, it is not the case that one can plan a business in a free market situation and provide a product with a three-year lead-in. That is nonsense and it cannot be done. From the time one makes one’s business decision and one puts one’s cow in the crush and puts in the straw, one must wait nine months before an animal is born and wait two years before a cow comes into the milking parlour. If anybody can tell me where the markets will be in three years’ time, then I will provide for it. However, nobody knows what will be the position. There must be political structures and interventions in food production in order to make sure that we do not have the cyclical volatility of boom and bust.

After much lobbying from the ICMSA, €150 million was ring-fenced for a voluntary supply constraint, but not per member state.

That was introduced on 18 July. Any reasonable observer would say that it had an immediate positive impact on sentiment. There was an immediate uplift in the buoyancy of dairy markets because the buyers were coming back into the market. It was the first time that Irish or European farmers had an alternative to producing the product. I see the processors responded with increases in prices. I would like to see that. The only other alternatives to this voluntary supply constraint that we currently have in the toolbox, after all the huffing and puffing, are either private storage or intervention. The voluntary supply constraint is designed to facilitate at 14.4 cent per litre, taking out 1.1 billion litres or 1.1 million tonnes of product. That is three times what we currently have dried in powder in intervention. We have somewhere in the region of 290,000 tonnes of skimmed milk powder and 100,000 tonnes of butter in intervention. Imagine had we not put that into intervention and we had this tool at our disposal six to eight months ago. We would not now have all that product overhanging the market, which is going to keep our price down for even longer. It would not have been produced in the first place and the markets would have gradually recovered. I know that the consumer has to be protected in this situation as well. We cannot ignore the consumer. However, it is a concept that needs to be worked on to facilitate a reasonable price graph for both the consumer and the producer. I believe it should be there as an automatic trigger once we fall below the cost of production.

On the issue of the discretionary moneys, which is €350 million at European level and of which our portion is €11.1 million, we are very clear. The ICMSA would like to see that issued as an emergency measure in a single payment to farmers. It is uncomplicated, does not have administration costs and is within the rules and regulations. We made enquiries with the Commission and it is certainly within the scope of our Government to pay that as a payment to our farmers directly, specifically to our dairy farmers. We would like to see it matched by an equal amount here. We are lobbying strongly for that. That would amount to in the region of €1,200 per dairy farmer to try to help them meet their bills at a time when the contractor's bill, the feed merchant's bill and everybody else's bill all come in a concentration at the back end of the year. Therefore, I believe it is important to do that.

There was a discussion earlier that we were listening to in the Visitors Gallery about interest rates and alternatives for that money. I believe that we cannot let the banks off the hook. If one benchmarks Irish debt with the rest of the European debt and one compares the average cost of money in Europe with what Irish farmers have borrowed, one will see that we are paying €80 million per annum more in higher interest rates in Ireland than our competitors and counterparts in Europe. That is an intolerable situation that can be addressed by Government. The Government can have a role in creating a situation in which that will not be allowed to happen.

I will be brief on the other points because that is the central point of what I am trying to emphasise here today. We can structure our production in a different way that is more economically and environmentally sustainable. There is the issue of the management of stocks that are in intervention - 290,000 tonnes of skimmed milk powder and 100,000 tonnes of butter. Those stocks need to be held there until the markets themselves return to a sustainable level for the primary producer. We cannot take our eye off the ball in this regard. I have mentioned the points about market access for beef. We need competition in terms of purchases of cattle in this country. We made a submission to the EU competition authority on the proposed merger of ABP and Slaney Meats. I can take questions about that afterwards.