Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I thank Deputies Cahill and Penrose, as well as the Chairman, for their questions. I should emphasise that I acknowledge that it has been extremely challenging inside the farm gate physically, financially and from a general well-being perspective for a profession that is practised substantially in isolation. We should never underestimate that particular aspect of this challenge. The overwhelming emphasis in everything that I and the Department have been trying to do over the past several weeks has been about closing the deficit ourselves and using all the instruments and leverage available to us.

There already has been some commentary on imports but we should bear a couple of factors in mind. We have put forward a substantial package to support imports between now and the end of the year. We anticipate it will be approximately 85,000 tonnes, which is a multiple of what was imported earlier in the spring. The cost is €4.25 million and it is likely to be only a fraction of the deficit. It is the most expensive aspect of the initiatives announced but it was deliberately the last of those announced to date because we did not want to raise the matter of imports to the level that it would be seen as the solution to the fodder crisis. Even if we commandeered all the trucks and boats, we could not import enough if we were at it flat out from now until May Day next year. That is even if the volume of fodder needed was available, and there are issues around its availability. This is not just an Irish problem. There were forest fires in Greece and Portugal, as well as in the Arctic. It is an issue. Culled cows in Sweden have an impact on the price of beef here and it is normally a strong market for us in the summer. This is a pan-European matter. Interestingly, in that context, we have recently concluded an overall analysis for the Commission requested of every member state on the impact of this issue. It is a problem for the whole of western Europe.

Deputy Penrose correctly indicated that we are living with the realities of climate change, namely more frequent and intense extreme weather events. In the past two years we had issues with the harvest of 2016, flooding in Donegal in August last year, the events of this past winter and the drought. We had Storm Emma and Storm Ophelia. It is the effect of climate change. I thank each and every participant in the stakeholder group, as it really worked in identifying issues and proposing solutions. I include colleagues in the Department and those in Teagasc, as well as the farm organisations, banks, dairy processors, co-ops and advisory services, including Teagasc. Each of those were constructive and proactive. There are a number of deliverables from the stakeholder group but the most significant action of the group was to give advice to farmers. The advice continues to be to avail of every opportunity between now and the end of the growing season to conserve the maximum amount of fodder that we can before we take stock.

The Chairman made a point about the south east and all the indications are that the soil moisture deficit is highest in the south and south east in particular. That clearly has an impact on the capacity to conserve fodder for the winter ahead. This is why concessions relating to the GLAS regulations are very important. Previously, migration of fodder might have been from the south and south east to the north and north west, to some extent. Generalisation is dangerous but many of the participants who will now benefit from the relaxation of regulations under GLAS, particularly with respect to low-input permanent pasture, are in the areas of the country not as challenged by the drought as the south and south east have been. There was a maxim during the economic war or the Second World War that there would be "one more cow, one more sow, one more acre under the plough". Farmers in certain areas may have sufficient fodder for themselves but they should use every opportunity between now and the end of the growing season to conserve as much fodder as possible because there will be a domestic market for it. Certainly the 270,000 ha liberated from the normal regulations under low-input permanent pasture between now and December offer significant potential in conserving fodder. We should look at that.

The import of fodder will play a part and as I mentioned, we have €4.25 million set aside for that, anticipating it will bring 85,000 tonnes of fodder. To put that in context, in the spring we imported 16,000 tonnes or 18,000 tonnes. We are anticipating a substantial ratcheting up of the volume imported, although it is nowhere near meeting the shortfall. The resolution to the shortfall is still, substantially, in our own hands and in what we can conserve between now and the end of the year.

Live exports have always been a priority and I can provide some figures to Deputy Cahill, as they are still important. A total of 188,093 live cattle, comprising 102,672 calves and 85,000 adult cattle, were exported during 2017. That represented a 30% increase on 2016 numbers. To date in 2018, live exports are up by 30% on 2017 numbers, with an increase of 46,366 head. In the year to date, 151,687 calves were exported, a 50% increase on the same period last year, with 42,424 adult cattle being exported. The record is there. I acknowledge its importance, and that is why significant effort has gone into those live exports. There was an initiative regarding the veterinary export fee and the export of calves has significantly increased. Those markets are very important. North African countries and Turkey are really important for weanling exports. We continue to engage, whether it is with the Turkish, Libyan or Egyptian authorities. We are engaged across all potential markets. There are visits that have concluded or are imminent, and contact is ongoing because of the importance of the sector. It is a significant part of the competition within the beef sector. I share the Deputy's commitment to ensuring that live exports remain really important.

On finance, I listened with interest to Deputy Penrose and I know that this committee intends to engage with the banks and others soon. Access to finance is important and we have had a number of achievements in this area, including the initial €150 million loan fund for working capital which benefitted 4,249 farmers. It is not the panacea for the fodder sector. Deputy Cahill made the observations that the fund was insufficient and that those who really needed it most did not get funding. He must bear in mind, however, that whether one is referring to a State-sponsored or banking sector initiative, repayment capacity will always be part of the eligibility criteria. In terms of the pillar banks which were partners with SBCI and the State in the last scheme, repayment capacity was an issue for anyone who applied and the loans provided were low-interest. Deputy Cahill referenced the fact that new loan products have been launched in the market as recently as today. I did a quick calculation on a three-year repayment of a €30,000 loan for working capital under the latest initiative by one of the pillar banks in comparison to the State's €150 million loan initiative and the difference in repayments is €12 per month. Our objective with the initial €150 million scheme was to address the problem that existed while also acting as a stimulus to encourage greater competition in the industry and, to be fair, there is evidence that the industry is responding. The credit union movement is also responding. Deputy Penrose made reference to other models of financing that were under consideration but the credit unions have responded too. There are now several products available to the agricultural sector from credit unions which is welcome because all additional competition is important. This is not just about the banks but also about what the co-ops themselves have done. All of them have responded, either by providing low-interest or zero-interest credit facilities.

The Department of Agriculture, Food and the Marine is not a comfortable fit with providing banking products. We responded because there was a deficit and initiated the €150 million loan scheme. A €300 million fund was developed in conjunction with the Department of Business, Enterprise and Innovation and 40% was ring-fenced for the agrifood sector. We are developing a product for capital investment for the industry as well. It is clear now that the industry is responding in a competitive way and I look forward to the committee's engagement with the pillar banks and SBCI later today. Context is everything and in the context of the capacity to be competitive, we were impacted by the crash through which we went through. That said, there is evidence that relative to what we did with State assistance and the €150 million loan fund administered through SBCI and delivered by the pillar banks, that those banks are somewhere near that themselves in terms of their latest product offerings. That is a sign that there is a degree of competition in the market, which is really important.

I touched on the fact that fodder problems are Europe-wide and Deputies Penrose and Cahill asked whether concentrates would be available. It is the case that there is a shortage in Europe because of climate issues but recent reports indicate that the global supply is sufficient. Grain production is growing in Russia, the USA and in South America but Europe is in deficit. My conversations with the co-operatives rather than with private millers indicate that they have been active in the market in terms of forward buying and so forth. I am not hearing anything alarming at this stage in terms of the capacity to source fodder but we will keep the matter under observation.

Interestingly, in the context of the Chairman's point about culling and Deputy Penrose's references to Food Wise 2025 targets, Glanbia conducted a survey of its own supplier base recently which indicated, notwithstanding the challenges, that there is no significant rush by farmers involved in the survey to use culling as an instrument to manage their way through the situation. Dairy production is back up and, in fact, is ahead of where it was this time last year. While farmers are impacted financially, they obviously see some advantage in continuing to milk cows for the longest possible period to drive income. They do not see culling above and beyond the normal routine culling of cows as necessary. I would make the point, however, that in terms of overall efficiency, we need to keep improving genetic merit, whether in beef or dairy.

The Chairman comes from a strong tillage area. The target under the tillage initiative is 25,000 ha. There is a strong take-up from the seed houses and, in fact, they estimate that they have sold seed equivalent to a lot more than 25,000 ha in recent weeks. Some of the resolution in the Chairman's own area of the south and south east may come from that partnership between tillage growers and livestock farmers.