Jackie Cahill (Tipperary, Fianna Fail) | Oireachtas source

I had to attemd another meeting and apologise for being away for some of the debate. It is not often that I agree with the Green Party Deputy, but I agree with his statement that we have to change. As it stands, the beef industry is not going to survive. I have never seen such despondency among beef farmers. Last week I said in the Dáil that it did not matter whether one was a suckler cow farmer, a calf-to-beef producer or a store producer as it was only a question of who was losing the least. Everyone is losing money. This must not continue and it will not because farmers will make an economic decision to leave the business.

On the CAP budget, beef farmers have become very much dependent on the single farm payment.

In the context of Brexit, we have attended numerous conferences discussing the next reform of the CAP. The one thing I see coming out of that discussion is that the CAP is no longer the number one priority in Brussels. Immigration and defence have passed agriculture when it comes to priorities in Brussels. We can act like ostriches and stick our heads in the sand or we can realise that this is the position we are in. We have an uphill battle to maintain the CAP budget. If the UK leaves, it will take its money with it. Again, this will be an uphill struggle. The reality is that for the past 20 or 25 years, the percentage of the EU budget spent on agriculture has decreased. If we take inflation into account, the amount of money in the envelope has reduced dramatically.

Before I left the meeting earlier, I heard that the payment should be directed towards the genuine farmer. With all due respect to everyone, the last time we were asked to come up with a definition of "a farmer", we failed to do so. If a man is unable to make a living from his land and has to get off-farm income, are we going to say he is not a genuine farmer? Where will the definition sit? For economic reasons, many people have off-farm income. While it is lovely to say that the payment should go to a genuine farmer, I do not know how that would operate in practice.

Regarding a cap on the single farm payment, if a cap is going to be effective, it must be set at a realistic limit. If we keep putting in conditions that this and that must be allowed, we should not go through the pretence of putting a cap on it because a cap will be immaterial. We must face reality as regards the CAP budget. We will not have enough to do everything we want to do. If we are serious about trying to keep people on the land, preserving family farming has to be our top our priority. A realistic cap on payments must be introduced. There is no point in thinking that we will have an endless supply of money because we will not have one. Even today, if we look at Commissioner Hogan's comments about Brexit and how there will be no special fund allocated for Brexit, it reinforces the Commission's attitude to agriculture and that agriculture is no longer that high on the Commission's agenda.

Regarding the Competition and Consumer Protection Commission, this is something on which we need to focus if we are to change things. The effect of feed lots on the marketplace and the effect of the monopoly in which factories operate must be looked at. The Competition and Consumer Protection Commission is very quick to focus on farming practices. It needs to look at how factories are operating. This has been talked about for a long time but nothing has ever happened.

I also wish to address the fifth quarter and rendering plants. At this stage, a serious amount of money is being made out of the fifth quarter in cattle. It is not being factored in anywhere. It is well over 20 years since BSE hit us. Many restrictions and costs were introduced into the system. This is something that needs to be revisited and re-examined. Many different parts of the animal had to be disposed of in the past but this is no longer the case. An analysis needs to be carried out as to who is making what out of it and what costs are still being imposed on farmers. Even the knackery costs that were introduced after BSE have never been revisited. I do not think there is the same justification for the costs that there was 20 years ago.

Regarding the dairy calf and the beef scheme that was talked about in the last week or two, there is great fanfare about this great initiative.

The last initiative I saw factories embarking on in a similar fashion encouraged farmers to keep Friesian bulls for beef. It encouraged farmers to keep Friesian bulls and when they reached 18, 20 or 22 months of age, they were left high and dry because there was nowhere to get those bulls killed and farmers lost a substantial amount of money. I hope we do not see a repeat of that this time around. To me, this is a knee-jerk reaction on the part of the factories, which do not want to see live exports in any significant number from this country to bring equilibrium back into the marketplace. I heard a figure mentioned this morning. It was said that we need 400,000 live animals to leave this country per annum. I would not disagree with that. Virtually no animals over 12 months leave this country. There were numerous announcements about live markets being open for us. It is grand having a market open but if there is no stock moving, there is not much point to it. The same is true of meat. We are told that 170 countries are open to our products but, in fact, virtually all our beef is sold within the EU. Unless the supply goes to these markets, their being open is of no use. Deputy Fitzmaurice spoke about how we need a good live trade to have a good dead trade. We badly need that competition for older animals so that there is some live export outlet for them that would put competition at the ring side and compete with factories.

We talk about sucklers and suckler beef and the brand it gives Ireland but most of the media attention and most of the promotional activity over the past number of years has been in the heifer scheme and the Aberdeen Angus scheme. That is where the focus has been. We are talking about prime heifer and Aberdeen Angus. If we look at the advertisements, we can see that most of the promotional activity was based on those two schemes. The reality is that 80% or 90% of those animals come from the dairy herd. The quality and taste of that beef measure up to the highest standards. I saw figures in some submissions. Roughly only 50% of those animals qualify for quality assurance payments even though they are sold as part of the prime heifer and Aberdeen Angus schemes. They are not qualifying for the quality assurance payment. A person buying a burger in McDonald's will see a sign saying "quality assured - Irish beef" but I can virtually guarantee that none of that beef had a premium attached to it when it was sold by the farmer.

Our industry must change. The current model will not survive. We have had Food Harvest 2020 and Food Wise 2025. If we had a scheme for 2030, and I presume we will, the barometer of any scheme going forward must be farmers' income. That is the one issue where both these two schemes have fallen down. The significant economic reality is that farm families depend on the single farm payment. We have a struggle to maintain that. If Brexit happens, the EU will be seriously self-sufficient in beef. The Dutch and the Danes send a lot of product to the UK as well. They will be out in the marketplace looking for market space as well.

Regarding the trade deals the EU is trying to do with South America, such as that with Mercosur, concessions will be made. When one talks about them, it just shows how the Commission's emphasis has changed. When the Commission is prepared to allow 74,000 or 100,000 tonnes of beef from South America to get a deal with Mercosur, it shows how its views have changed.

This committee has decided to try to compile a report on the future viability of the sector and whether Food Wise 2025 can meet the challenges farmers are now facing. The challenges in our sector were never as strong. It is not often I agree with a Green Party Deputy on farming matters but he is correct in that what we are doing now is not sustainable. This industry has to change. We have to adapt, and producing 40,000 cattle a week for our factories will not give a viable income to the primary producer. We do not have the ability to sell that amount of beef at a viable price. That is the reality we have to face. Cattle prices this week are at €3.70 per kg. If one put freezing cattle, so to speak, on the grid at €3.70 per kg, one would be lucky to come out at €3.45 per kg. Following a year when the cost of concentrates has increased rapidly the one thing farmers will not be worrying about is their income tax bill. My apologies for having to miss part of the meeting but the committee hopes to put forward a report containing pointers that it is hoped will point to a way to restore profitability to this sector.