Dr. Frank O'Mara:

The Deputy asked a fundamental question about ongoing support for the sector. As it is a policy issue, I will not say "Yes" or "No". Profitability is a factor of efficiency on a farm, the price received and direct payments. Senator Mulherin referred to the Chinese market and the great work done by Bord Bia and others in gaining access to it. It is really important. We must also remember that beef is competing with chicken and pork which are much cheaper meats throughout the world. There is only a certain amount that the market will be able to return. We need to try to move up the value chain and get into premium markets to capitalise on the high quality product we have, but there is only a certain amount that can be done. We operate in the area of efficiency and there is much scope on many farms to improve it. For various demographic and other reasons, some would probably be slow to adopt the technologies we advise, but there is a large cohort of farmers whom we believe have the potential to adopt some technologies to improve grassland management or the genetic merit of suckler cows, etc. The schemes mentioned by Mr. Kelly are very important, not just for the income support they provide but also for the improvements they can bring about on farms and the long-term benefits they provide.

There is no doubt that there is a profitability challenge in the sector. When beef farmers with good infrastructure on their land base and good land see the profitability in dairy production, it will be an option for some. If beef farmers do not improve their margins through productivity or the price does not increase, these farms will continue to face an income challenge, unless a support payment or whatever else is provided.

Whether that happens is not a decision for us. It is a sector which has to deal with a big income issue.