Dr. Frank O'Mara:

Mr. Kelly will answer some of the questions as well. There were many questions about price and the market. We will comment on that as we go through the questions but we do not have any answers on it. It is a huge conundrum.

The big issues for a beef farmer are the price he gets for his cattle and how efficiently and at what cost he can produce those cattle. Our role relates to how efficiently and at what cost a farmer can produce cattle. Getting an adequate return from the market is a job for the beef farmer. They are our clients and we would love them to get more.

Deputy Kenny asked about the BETTER farm beef programme and asked where were the farmers who were on the programme. They are all in every county and on all land types. Variation in performance and profitability arose depending on land type but in all land types, we were able to show an improvement in performance by focusing on technical efficiencies. The Deputy also asked about an alternative model for the suckler cow, while another Deputy mentioned contract rearing. There are alternative models, such as dairy calf to beef, but we see the suckler model as integral for the future of many farmers. This is for various reasons. It does not suit everybody to go into dairy calf to beef farming as it is labour intensive at the rearing phase. Sucklers are a suitable system for many small fragmented farms where there is wetland and so on. It is not a profitable enterprise at the moment but we have to keep working at it. The marketplace has to keep working to produce a viable return for farmers within the system. There is an opportunity in areas such as better grassland management and better fertility.

Price is a major issue. Over the years there has been talk of getting producer groups together and getting farmers together to brand our beef better. These things can play a role but they have not, to date, been hugely significant in the beef or sheep sectors. There are a number of producer groups in the latter sector but, while they work well together, they tend to be localised and do not comprise a large volume of the sheep kill. It is the same in the beef sector. It has to be worked on but it will be slow progress to establish producer groups in such a way as to make a significant impact on the industry.

Senator Conway-Walsh asked about the impact of the dairy sector on the beef sector. We are seeing a fundamental change in the beef sector and we are, to some extent, going back to where we were in the past with 400,000 suckler cows and 1.4 million dairy cows. I do not suggest suckler cow numbers will reach that level, in the short or medium term at any rate. At the time we had those numbers there were 70,000 dairy farmers with an average of 20 cows each. Many of them have now got out of dairy and got into sucklers, and they will not be going back to dairy production. The structure of the industry has changed quite significantly. The share of the kill coming from dairy beef will continue its trend over the past couple of years so it is important that we work on the quality of the calf that comes from the dairy herd, as well as continuing to support the suckler herd.

Models of vertical integration are being adopted in factories that are contracted to farmers with feedlots to finish cattle and, in recent years, factories have integrated with suppliers for particular markets. They have a role to play in giving certainty to a producer as regards his margin at the end of the process. Senator Conway-Walsh also talked about the role of farming as a public good. We put up a slide on its environmental performance and beef farming has a strong performance in that area, contributing a lot to biodiversity, good water quality, etc. That is an important facet of the industry.

Senator Paul Daly asked about the CAP. The CAP will try to target people who supply environmental goods to reward then for their contribution. Senator Conway-Walsh asked about our relationship with beef factories and our role in regard to pricing and exports to China. We have no formal relationship with the beef factories but we collaborate with them on various initiatives they take to support producers, such as the Teagasc-Irish Farmers' JournalBETTER farm beef programme, whose advisers are being funded by the three largest meat companies and FPD. We also collaborate with them in research on meat quality through Meat Technology Ireland, an initiative funded by Enterprise Ireland and meat factories to look at the post-farm gate aspects of meat quality. We have no relationship with them in the area of pricing, however, or how they set their prices.

We do not have a significant direct role in exports to China but we support the Department when delegations come to Ireland by bringing them to farms, telling them about the production system and giving them information about sustainability and animal welfare in our industry.