Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

I agree with Deputy Willie Penrose. We are at a critical crossroads. The Common Agricultural Policy, CAP, is a key cornerstone. The Minister does not have an easy job in delivering what we need in the economy and for industries. We have probably had one of the worst springs we have ever experienced and farmers' incomes are under huge pressure as a result. The three things about which we are talking will increase the pressure. The vast majority of farmers depend almost completely on the CAP for their income, while we have Brexit and Mercosur coming down the tracks. There is no good news in any of the three stories for farmers' incomes, on which we do not want to lose focus. Maintaining the budget will be a mighty challenge, but its maintenance is critical for all sectors of the agrifood industry. I have been nagging about the CAP for many years and will say to the next person who says this negotiation will simplify it that I have been hearing that for the past 20 years and that it will not happen. We will put up with the lack of simplification if we can hold onto the pounds, shillings and pence. It is imperative, therefore, that we try to maintain the budget for the CAP.

I have a few particular questions about the CAP and what our policy will be in the negotiations. One is about the reference years - 2000 to 2002. Are we going to stand over them? Will future payments be based on them? I would like to know what our policy is on the price support mechanisms in place. In 2018 the price support mechanism for skimmed milk powder has been changed significantly. What will be our stance on it post-2020? Will the aid to private storage, APS, and intervention schemes be part of the next CAP? Will they be accommodated in the budget? In February when supply was very slack, we saw the price of milk drop by 3 cent per litre and there are indications that the price will drop further in March. Because of the huge costs involved, it will put the sector under immense pressure. Unfortunately, skimmed milk powder is trading at well below intervention levels. There is a significant overhang in intervention stores and it looks like it is extremely hard to move the product. What will our policy position be in the CAP negotiations on these essential market tools, especially when it comes to the seasonality of our production?

The way young farmers are treated will be a critical issue. Many farmers lost money in the last round of CAP negotiations, with a linear cut for young farmers. We will talk about special schemes for young farmers once we make it crystal clear from where the funding will be sourced. The same amount of money is coming through. Do not take my comments as being against having a reserve for young farmers, but it has to be made very clear from where the money will be sourced. It will be a very difficult hill to climb to have a separate fund in the conditions in which we are operating. We have to be clear with farmers how such a reserve will be funded. I would like to know what the Government's policy position is in that regard.

At this stage we have talked at length about Brexit and Mercosur. We have a beef industry that is under extreme pressure. I am a man who fattens a few cattle for his sins. We are heading into April and cattle prices are lower now than they were in November. The markets we have established around the world are dependent on a constant supply of beef on a 12 month basis. How can we operate without the traditional lift in spring prices? This is the second or third spring in a row in which there has been absolutely no lift in prices from Christmas onwards. In fact, prices moved downwards after Christmas and have stagnated since. The markets have been hard going. We had a Private Members' Bill about suckler cows and the figure of €200 per suckler cow. It will be imperative to maintain the suckler cow herd. Unless there are winter finishers to buy the young stock, no matter what direct aid is given, we will not be able to maintain the herd. I do not know how farmers will be able to keep coming back to the ringside to buy young stock, given the huge cost involved and the price being paid by processors to compensate them. As the Minister said in his statement, we are 102% self-sufficient in the market and the consumption of beef is declining. We now have these two major torpedoes coming at us, with our access to the British market under threat and more beef being brought in from South American countries.

It is time we took a realistic look at Food Harvest 2020 and Food Wise 2025 in which targets were included to increase production. However, there is no point in increasing our beef production if we are to receive the price being received. As has been said, we need to look at these issues honestly and tell farmers exactly the situation in which they will find themselves. The threatened lack of access to the British market and the increased tonnage given away, with the promise of more to secure the deal, will make participation in what is an already unprofitable sector completely untenabe. There has to be a realistic look at that issue as we do not know what the final outcome of Brexit will be. We know what has been conceded in Mercosur. It is very frustrating for farmers here who are operating to extremely high standards in terms of cost compliance, Bord Bia audits and quality assurance which put an extra cost on food production. Our already fragile industry will be undermined by the importation of products from South America that will not be produced to anything like the standards imposed on farmers in Europe. The European consumer is right to demand such standards which we have achieved at a high cost. However, the European Commission is allowing our markets to be undermined by the importation of products of lower quality. This is not acceptable.

The Minister has three very hard issues coming down the tracks and absolutely no good news for the sectors involved. It is absolutely essential to maintain the budget for the CAP. The Minister is fighting for the survival of the agrifood industry and a positive outcome is essential.