Mr. Jim O'Toole:

I thank the Senator. I will try to answer his questions in the order they were asked. In respect of the focus on sustainability, it is correct to say that our strategy is very much focused on developing and delivering sustainable food in Ireland and our ability to win market share and develop export markets. The Senator outlined some of the pressures of which we are well aware. There is regulatory pressure on agriculture and food production in Ireland. However, it is also important to recognise that it not an either-or situation. Our ability to win export markets is highly correlated to our ability to demonstrate that we have sustainable food production. I mentioned a number of times in my opening statement our Origin Green programme. Since taking over as CEO, I have had the opportunity to meet some of our major customers at a senior level for the first time. As I said, they are somewhat jealous of the work we are doing through Origin Green. Our ability to win in the marketplace is very much about being able to demonstrate our environmental and sustainability credentials. As well as demonstrating our sustainability credentials, our focus is on driving value creation. We want to see the value of our order books increasing per unit. That is what we are about. We are trying to target the best channels, customers and markets for the best products. We are trying to balance all those variables so that we maximise the value. If we are facing constraints around carbon emissions, our ambition is to drive the value of those exports so we can return it to the farm gate. It is not about the volumetric output. We are after the unit value. That is our strategic direction.

The Senator also asked about developing the sector and made a comment about a previous committee interaction with representatives of Sheep Milk Ireland. We have engaged with the Crosse brothers. They were part of one of our food works programmes, which are run in collaboration with Enterprise Ireland and Teagasc. Those programmes are about identifying new businesses. We have worked with the Crosse brothers in the past and have engaged with them more recently. Where there are business ideas and fledgling companies, we work with them. We have, for example, a grant aid programme and marketing assistance programme. We work on market development, insight and innovation with companies rather than providing capital investment. When those witnesses were before the committee, they also mentioned their need for capital investment. That is not within our remit but we would work with them to develop their brand, help them understand market dynamics and identify market insights. We have been engaged with that company in that context. If memory serves me right, there are seven farmhouse cheese companies using sheep's milk. It is a fledgling sector but as we mentioned earlier in terms of diversification, we are certainly open to working with companies and identifying market opportunities. We are familiar with feta, Roquefort and the various sheep's milk cheeses that are prevalent in the Mediterranean markets. There may indeed be an opportunity to grow those markets. We will work with them.

The Senator also asked about calves and exporting them on the hook or the hoof. We are keen to eliminate the calf slaughtering that is happening at a young age. We might touch on that issue later in the conversation. Last year, we worked with a couple of people on a pilot programme around the opportunities and dynamics in developing a veal industry. We did some trials with a company. Some of the calves we export live typically go to The Netherlands. They are all for veal production. They are processed in The Netherlands and are typically consumed in Italy and southern France. Some 15%, if memory serves me right, of the beef consumption in those markets is beef and veal so there is a market there. There has never been a traditional veal processing industry in this country. That is probably due to the fact that for many years, we were constrained by quotas in terms of the output of our calves. It is also a highly seasonal industry. Notwithstanding all of those constraints, we are working with a couple of entrepreneurs who are interested in exploring the idea. That is something we are happy to update the committee on as it progresses.

The Senator also referred to China and the disruption caused by the BSE case in Brazil. This is just our view, but we anticipate that given the scale of Brazil as an exporter to China, the restrictions on Brazilian beef may not last as long as those we incurred. There is some capacity for Brazilian exporters to divert their exports to Uruguay or Argentina. Many of the large processors in Brazil have facilities in other South American countries and are able to fulfil those orders. While there may be a small opportunity, and to be candid it is too early to say whether there will be or not, we also need to be mindful of the fact that those exports that might have gone from Brazil to China will find their way onto the world market and we will have to compete with that volume of product somewhere else. I do not want to be taking away the silver lining but that is the market reality.