Mr. Liam Dunne:

I will go back for a moment to the issue of world market prices and where we are after five years of a flat price. This is interesting to look at because we have not had a flat price for so long in well over 100 hundred years. It is really quite extraordinary; it is even ore extraordinary when we stop to consider that the French lost a quarter of their harvest in 2016 without this having any effect on the market. Many people have asked the question: what would it take to change this? The impact of a world weather event was mentioned but I am not so certain that even a hurricane in the north Atlantic would make any difference at this stage.

Something has happened behind the scenes, however, which people may not realise and which is having a huge effect on matters. In 2009, the G20 world leaders expressed concern that prices had been going either through the roof or through the floor right between 2006 and 2009. When prices go through the floor, the producer gets hammered. When prices go through the roof, the consumer gets hammered. The people making money in between, of course, are the traders, particularly if they can spot these trends in advance. Apparently, the G20 leaders were particularly worried about this. They highlighted the problem and engaged people to do some work on it. In 2013, a new system called the agricultural market information system, AMIS, was introduced whereby all the producer and major consumer countries and blocs made their data available in confidence to each other. As the committee will be aware, in most countries it is not commercial bodies that carry out the trading, producing or purchasing of grain: it is governments. Those governments then put the figures out. As of June 2017, only two countries have not participated in this system, namely, Nigeria, which is a major consumer, and Kazakhstan, which is a major exporter. The system provides information to anyone who wants to buy at any given time. Last year, for example, the Egyptians wanted to buy French wheat. When they saw that the French harvest was in disarray, all they had to do was examine the system and see where there were plenty of other supplies of wheat.

While there was always an understanding that somewhere between 15% and 20% was necessary as a kind of floating stock, it would now appear that this level could probably drop far lower. The AMIS system has had the effect of driving the price down as far as it can possibly go and keeping it there. Until that figure of 23% of stock starts to change - by which I mean drops below 15% - it is unlikely that we will see any increase in price. We are clearly in a devil of a pickle. We are in a high-cost area of production and while we can produce good yields, good quality wheats, by which I mean hard wheats and so forth, are difficult to produce. Wheats for human consumption are difficult for us to produce. We can produce animal feedstuffs to a large extent, but this is a high-cost country. Almost everything we need in order to produce our grain has to be imported, which leaves us very exposed.

When it comes to the actual physical importation of grains into this country, it is worth noting that we could shut down the 2 million tonnes that we produce and import it all instead. We could probably get it even more cheaply if we wanted. There is, however, a very important environmental issue that needs to be considered. Recently, I saw a statistic showing that diesel engine cars in Europe outnumber those in the rest of the world's countries put together. In other words, Europe has more diesel engine cars, vans and small trucks than anywhere else in the world. The fact is however, that 16 major ships at sea will produce more emissions than all the cars, vans and trucks in Europe. We can rely on imports if we want to but there will be an environmental impact. I am quite certain that there are lots of farmers throughout the country, many of whom who use balers or combine harvesters, who are scratching their heads and wondering if what they are looking at is climate change. Is this country going to be a virtual no-go area for certain activities? Can we continue with such activities?

A farmer will look at three things at the beginning of any harvest: he will look at his crops and hope to have good yields; he will look at the weather and hope to have good conditions for the harvest; and he will look at where prices are and hope to get a decent return for his yields. The farmer can probably cope with a misfire in respect of one of these three factors. Last year and again this year, however, we are looking at two misfires so farmers are in a very bad way indeed. Many of them are very seriously considering whether to resow. As the committee is probably aware, resowing would generally be starting at this stage of the year. We have lost 500,000 tonnes of production between 2015 and now. In 2015, we produced 2.6 million tonnes and this year we are producing barely over 2 million tonnes. Our current guess is that we could easily lose another 500,000 tonnes between now and next year. Many people, including a sizeable number of the bigger growers, are thinking of getting out of the whole sector. We are at crisis point.

I spoke to an agricultural journalist today who thinks that the drop could be as significant as 1 million tonnes. That is how negative the sentiment is at the moment. There is nothing to help or support people in getting through this harvest, mentally as well as financially. That is one of the reasons we are looking at a claw-back on the sale of entitlements because it is one way whereby farmers could make some fairly fast money to help with their debts. It costs approximately €400 to grow an acre of cereal. In almost every case in Ireland this year, the acres of cereal harvested are done so at a loss. I can only leave it to the committee's imagination as to what happens when it is not harvested, but we went through that last year. We still have our fingers crossed that crops are holding up reasonably well but there is going to be a serious loss of straw out there at this stage, regardless of whether we like it. I have no idea what implications that will have for the rest of the winter. I apologise for staying on this topic, I had better move on a bit.

Deputy McConalogue referred to the drop in production and where matters currently stand. As Mr. Healy mentioned, the IFA's whole problem with the fact that our grain was being discounted against imported grains remained the case until last year or so. The actions that we took last year highlighted to a lot of farmers what imported grains actually involve. When we checked back on the situation, we discovered that poor-quality grain was being harvested in the United Kingdom, put straight onto boats and shipped over here. That is what was going on. We are in a deficit for feed wheats and this year, for example, we know that wheat came into Ireland that was rejected by some of the compound mills. I was talking to the chairman of the pigs committee recently and he mentioned that a number of his members are complaining bitterly about the fact that some of the Ukrainian wheat is certainly not up to scratch either and is giving them very poor results. If we leave ourselves at the mercy of imported grains, we will very much be at their mercy. They are not as good as what we produce ourselves but there will always be people who put out a ration to farmers at an attractive-looking price. That is the situation.

I now come to the GM issue. As Mr. Healy mentioned, members might be interested to know that the IFA has produced a leaflet on the subject of the all-Irish rasher, what is involved in it and how it can be achieved.

In order to get enough protein into it, it is done with an alkali treatment and beans are included. Both Dairygold and most of the major merchants have told us already this year - we have not met with Glanbia yet - that they will take as much beans as they can lay their hands on but at a price, of course. We need the support we have been getting from the EU on beans. That support has kick-started the whole protein industry here. We need to push it on further but we need more support. We are looking for that in the next round of CAP reforms.

On Energia and sugar beet, the EU is determined that the next round or second generation of energy crops will not impact on tillage land. This policy is causing much concern and that crops such as oilseed rape may disappear from our repertoire which we cannot afford. We would love to go back growing sugar beet. If it becomes economically viable and possible, we will be the first to stand up and push it on. The figures, however, suggest it is not likely to happen in the near future.

Mr. Joe Healy is correct on malt and barley. When production dropped as low as 60,000 tonnes, the first thing we had to do was grow the industry. There has not been any investment in additional plants for processing malt and barley. Without giving away my age, the last plant I recall being built was in Athy close on 50 years ago. It is on the cards that we will see growth in this sector. The existing plants are working at maximum capacity but we need further development with new plants put in place.

There are only two countries in the world where malt and barley processors work hand in hand with farmers, Ireland and the Czech Republic. In every country, there is always a third party in between. We have pushed this industry as far as we can, getting every last penny in premiums we can, knowing each one is going back directly to the farmer, with no middleman like in other countries. In the plant in Cork, the barley is assembled by Dairygold and Glanbia which does not happen with burnt malt.

Animal feedstuffs are where it is all at. If we are going to produce high-quality Irish milk and beef, we are adamant the animals should be fed on an all-Irish ration. How do we get there? The proposal we put to Dairygold the other day was that it may have to put out contracts to farmers to grow barley. We proposed that it gives us the base price, the international trading price, but top it up with a serious premium. Giving a premium of €5 to growers is not sufficient from a co-op. If it wants stubbles for the excess slurries and municipal waste, then someone will have to grow it and something extra will have to be paid for it.

Many growers in the west complained to us last year that they did not count and we in the east would be just as well happy to see them disappear. I told them this was not the case as every acre of grain in the west is worth twice what it is anywhere else because of its effect on biodiversity, that the stubbles are there and the grain has a short distance to travel.