Oireachtas Joint and Select Committees

Wednesday, 26 October 2016

Joint Oireachtas Committee on Arts, Heritage, Regional, Rural and Gaeltacht Affairs

Sustaining Viable Rural Communities: Discussion (Resumed)

2:15 pm

Mr. Joe Healy:

I am not aware of the Department getting directly involved with any individual as of yet. If the Chairman were to ask them, they would say they had been in contact with the IFA. Only yesterday we called on the Department to help the mushroom sector, which is very exposed with 90% of our mushrooms going to the UK. Four mushroom companies have folded since the Brexit referendum. Yesterday we called on the Department to look to the EU. There should be and there are schemes regarding state aid. I know there is a provision - I forget the article number - that allows for aid for sectors that suffer excessively owing to decisions taken outside their control. We will need to continue to push for that especially for the mushroom sector. Today the managing director of Kepak suggested that something similar needed to be done for beef. That is our work with the Government and the Department of Agriculture, Food and the Marine on Brexit.

On market concentration and the food chain, only last night in Portlaoise we had a meeting to discuss liquid milk. In 1995 a total of 3,334 registered milk suppliers were supplying fresh milk for the winter trade and the milk-drinking trade. Twenty years later, only 1,982 remain. There was a drop-off of 40%, which shows farmers voting with their feet. The same is true of almost any sector in agriculture. We often say that what the consumer is paying is adequate to ensure a margin for the processor, the retailer and the farmer, but unfortunately it is not getting back to the farmer.

Teagasc quotes a break-even figure of €4 per kilogram in the production of beef. Currently we are at a base price of €3.60 to €3.65 per kilogram, losing 40 cent per kilogram, which is a loss of €160 on a 400-kilogram carcass; it is quite easy to do the maths on it. Teagasc also quotes a figure of 26 cent a litre to produce milk in a normal year. This year, 2016, was not a normal year weather-wise and farmers were selling at a base price for most of the year of 22 cent or 23 cent a litre - it went down as low as 21 cent.

I am chairman of the COPA food chain group. Christine Tacon, the UK groceries code adjudicator, spoke at our last meeting. She will attend a meeting we have organised at a venue close to Dublin Airport on 30 November. When the question was put to her, she was very clear on the need for mandatory legislation at national and EU level. Unlike what we have here, it needs to include a ban on below-cost selling. We also need an ombudsman to enforce the rules and laws on it. We need to ensure that the farmers and the producers of the raw material in each sector are getting a fair return from the marketplace.

Deputy Michael Collins is a member of two organisations in west County Cork. I know Cornie Buckley very well. I will be heading to Bantry tonight to attend an event tomorrow to commemorate the farmers who left Bantry in 1966 to walk to Dublin. That was where they started out from first. I am looking forward to meeting them tomorrow.

I am not sure if I took the Deputy up right on this. He mentioned co-operatives and the banks. Senator Hopkins also referred to it. Rather than calling it low-cost finance, what we have is lower-cost finance compared with where we were. A rate of 2.95% is great and we very much welcome it. An IFA delegation went to Belgium to meet farmers there about two months ago.

We met one particular farmer who had borrowed €650,000 using three loans with a fixed term of between five and seven years at interest rates of 1.4% to 1.7%. European farmers are our counterparts in Europe but they are also our competitors, which is a handicap. We very much welcome the 2.95% interest rate. It is a huge improvement on where we were but we like to think that there is room for further improvement.

We welcome the announcement of 500 extra positions on the rural social scheme and the reversal of the cuts made to the farm assist scheme in terms of the income and child disregards.

The areas of natural constraint, ANC, payments were not mentioned in the budget even though we lobbied hard for it to be included. When I attend meetings, farmers tell me that the ANC payments, or the disadvantaged area based payments, are from the one scheme where everything goes to the farmer unlike GLAS where one must pay a planner and vets for certificates. A sum of €25 million has been allocated and is due to be announced in budget 2018 even though we wanted it to be brought forward to budget 2017.

Next year's ANC review is something that we, as a lobby organisation, will need strong political will behind because very often, reviews are simply used as a means to reduce the number of participants. We hope the review will be like the agritaxation review that was carried out a few years ago where the Government accepted the issues that were put forward and there were no losses in that regard. The ANC review is critical for rural areas as the funding reaches the areas most in need. I have flagged the scheme to notify the committee that the IFA will seek its support to drive on this agenda.

Senator Maura Hopkins mentioned that 90% of basic payment scheme payments have been paid, which is great. Without a doubt, preliminary checks have been positive but 10% of such payments remain unpaid. It would make no difference if 90% were not paid because the payment is so important for each person who is part of the remaining 10%. That is where we need political support. Deputy Danny Healy-Rae has mentioned this also and we have lobbied for same. As much as 70% was paid out in the first tranche and 30% in the second. There were few or no penalties - one can count them on one hand - over 30%. The majority of penalties are below 10%. We feel strongly that the first tranche should be paid out to 100% of farmers and if there are penalties or anomalies the second tranche should be held back. This is the time of year when merchants must be paid and there is a tax bill. This is also an expensive time of year because children have returned to school and college fees must be paid. Regardless of how small is the basic payment, a 70% advance is crucial. We have fought for, lobbied for and continued to push for the 70% advance to be paid out across the board.

Access to low-cost finance has been mentioned. We need to ensure that the €150 million is drawn down and, if and when it is drawn down, that another amount is put in place to satisfy demand. Moreover, by next January the Department and the Minister should have worked with the banks in order that they are ready to roll and that the banks will not have the power to put obstacles in the way.

Senator Hopkins mentioned broadband. People used to call vice grip pliers a farmer's toolbox but broadband is now a farmer's toolbox. No matter where one goes in the country one must apply for a virtual private service, VPS. It is terrible that by the year after next, applications for important and crucial agricultural schemes for the countryside must be submitted online and yet there are large tracts of the country that have no broadband.

I will tell a story about poor broadband coverage that I am sure Senator Hopkins has heard previously. When I was on the campaign trail I visited a house and asked the woman who answered the door where her husband was. She told me that he was down the yard, so I walked down the yard and called after him. I thought he was in a particular shed because his voice came from that direction. I went into the shed and realised that he was in fact standing outside of the shed. I walked to the corner of his shed and saw that he was standing there holding his jacket over his laptop because that was the only place on his farm where he could get broadband coverage. He told me "I shall not shake your hand as I am afraid to move. You will get my vote but don't stir me." He stood in that position because he was trying to register his calves online. In this day and age, having poor broadband coverage is not on. Broadband must be rolled out.

It has been mentioned that the problem of litter cannot be tackled unless there are satellite cameras everywhere. There is an anomaly in the existing legislation because a landowner is held legally responsible for what someone passing outside of the wall throws out the window of his or her vehicle. That is wrong and needs to be tackled.

Deputy Cannon mentioned artisan food producers. I know every one of the artisan producers he mentioned, including his own neighbour who farms in Athenry. I am fairly confident that there is scope for further improvement in the sector and it would add value inside the farm gate. The sector is a niche market and has a long way to go before it is anything other than a niche market. We need to ensure that bureaucracy is minimised and the IFA organisation can lobby for that. People who are willing to set up their own business with a potential to create employment should be encouraged rather than discouraged. The level of bureaucracy certainly discourages many people from setting up a business.

Deputy Danny Healy-Rae mentioned bringing his heifers to the mart. He should look on the bright side because he was able to bring them home. I know many farmers who could not afford to bring them home but the Deputy's point is correct.

The movement of cattle to a mart is not a movement. If one brings cattle to a mart and then brings them home it is not a movement.

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