Oireachtas Joint and Select Committees
Thursday, 25 April 2013
Joint Oireachtas Committee on Agriculture, Food and the Marine
Fodder Crisis: Discussion with Minister for Agriculture, Food and the Marine
I welcome the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and thank him for coming before the joint committee to discuss the fodder crisis which is impacting severely on farmers in many parts of the country. Before we commence, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I invite the Minister to commence.
Thank you, Chairman, for holding this meeting. People were anxious that we meet last week, but it was not possible to do so. One of my problems is that I do not have the power of bilocation. This week I have been in Luxembourg, Brussels and Dublin, which has been difficult. I, therefore, thank the committee for its patience.
This is a serious issue, on which we need a significant response from lots of stakeholders and players to deal with a drastic shortage of available roughage fodder for animals. We have a national herd of approximately 6.5 million animals. We have just over 1.1 million dairy cows and 1 million suckler cows. We also have other animals that need roughage. It might be helpful for me to outline what we have been and are doing. If members have questions, we will try to deal with them.
There has not only been a response in recent weeks. We knew from last summer - we really did not have one - that we would have a difficult winter period in feeding animals. It was going to be expensive for farmers and there was a risk that there would be a fodder shortage. Throughout the winter months we ensured Teagasc would be prioritising fodder, feed and nutrient management for livestock. That was done in partnership with all of the farming organisations which have shown much leadership in this regard. Many farmers were anticipating managing a limited fodder supply up until a couple of weeks ago when everybody had assumed we would have a normal spring. If one looks at the statistics, for example, in the case of a big co-op such as Dairygold, at the start of last week 5% of its farmers had run out of stored fodder. By the end of this week the figure will be 50%. That is how dramatic the problem has become. Everybody had timed his or her usage of stored fodder and its availability to end about one week ago. There is now a significant shortage.
We are trying to do a number of things. First, we recognise that there is stress among the farming community, given the fear that farmers will not be able to feed their animals. For many of them, it is a little like not being able to feed one’s children. The relationship between many farmers and the herds they manage is incredibly strong. That is why when animals are screaming for feed and farmers cannot provide it, it is a particularly stressful time. Farm organisations have been strong on the issue and we have instructed our inspectors to be much more sensitive in how they inspect farms and deal with farmers for the next two to three weeks. We cannot simply stop inspections because we have an obligation to ensure monitoring takes place, but farmers will see a very different attitude in recognition of the prevailing stress levels.
One of the things that always adds some positivity in agriculture and farming communities is if payments are made ahead of schedule. At this time of year we would normally deal with 100 AEOS payments a week, but last week we dealt with 800. More than €500,000 was paid out last week and in the next ten days €2.5 million will be paid out through the AEOS. Ordinarily, these payments would be spread over the next month to six weeks, but we have people working around the clock to make the payments. Even complex cases are being paid. Unless there is a real reason to do so, there will not be a delay. There is a helpline for the small number of farmers who have no feed and no money to buy it.
I will discuss the availability of credit in a moment because there has been much discussion on this issue with banks, co-ops, grain merchants, feed merchants and so on. There is a helpline in place and there is no reason for any animal in Ireland to be starving at present even though there is a shortage of feed. A farmer who has no money to buy feed or who cannot access feed must contact the Department and we will pay to feed their animals. Obviously, while this is a farmer support measure, it is primarily an animal welfare fund. Members of the public who are concerned about the state of animals they have seen or heard also can ring the helpline and we will investigate it. The number is 1850-211990 and there have been 117 calls to that helpline thus far this year, of which 48 have related to fodder and practically all of those calls have been within the past week. The Department is dealing with this problem in a confidential way, farmer by farmer and case by case. It is trying to ensure the welfare problem resulting from a fodder shortage is addressed and this probably means accessing feed from the co-operatives that are bringing it in and delivering it to those farmers who have a dramatic requirement for feed quickly. A fund is in place that can be used for that purpose and I can add to it, as needed. In my view, this is a demand-led fund as opposed to a fund about which I propose to give an actual figure. Farmers who need help, if their animals are starving and they cannot get feed to them, should ask for help and my Department will give it to them.
The second point is that in the immediate term, what farmers need is not money but feed. All the farming organisations will make that point and any farmer I have spoken to - I have spoken to many - will state that what they need at present is access to fodder and not a fund. While everyone likes to have money to give out, in respect of the immediate crisis, what is needed is large volumes of roughage, namely, hay, haylage and silage for farmers or, in limited circumstances, straw as a temporary measure to get over a hump. However, what really is needed is hay and haylage and in consequence, the agricultural infrastructure in Ireland, led by the co-operatives, are importing very large volumes of hay at present. For example, Dairygold is bringing in truckloads of very large square bales at present. Each truckload has 20 bales and to put that into perspective, each bale is equivalent to approximately 38 small bales. Each such load will feed approximately 2,500 cattle for a day. While I do not have to hand the exact figure, between 85 and 90 truckloads have come in thus far, which is sufficient feed for 234,000 animals for a day. Another 150 truckloads are planned by Dairygold, which is bringing in between 25 and 40 truckloads every day, depending on the systems it has in operation. It is dispensing these loads between its different co-ops around County Cork and parts of counties Limerick, Kerry and Clare. Moreover, Dairygold is not alone in this regard. For example, a smaller co-op, Drinagh Co-operative in west Cork, was the first to start importing hay. Others also are doing it now, as Glanbia has really kicked into gear, as have Kerry, Lakelands, Connacht Gold and Wexford. I met all the chief executive officers of the co-operatives yesterday and they all have agreed to increase dramatically the importation of large volumes of hay. They will import it from the United Kingdom if they can get it there but if they are obliged to go further afield to other parts of Europe, they will do that too.
Consequently, farmers need to know there has been a significant response. This has never happened before in living memory. I can never remember this country being obliged to import large volumes of fodder from the United Kingdom. While this is not a political statement about what is happening elsewhere, if one was watching the television station BBC Northern Ireland last night, one would have seen that a fodder crisis also is being spoken of there. Moreover, people there were talking about following the example of the Republic in terms of how we are responding. While we are doing a lot, we of course may need to do more, which is the reason I seek feedback from members. However, this week I have recognised that to feed their animals, many farmers will be obliged to buy imported hay, which is expensive. The Department has committed to covering the cost of transporting this hay to enable them to buy it at normal prices, if you like. For example, Dairygold is bringing hay all the way from Kent, which is the other side of England. It is an eight-hour trip to bring this hay to a port in United Kingdom to bring it across to Ireland. Moreover, it is costing €150 to bring into Ireland those big square bales. They are being sourced for €75 and it is costing €75 to transport them here. Consequently, for a farmer, it is costing €150. The Department is paying a large portion of the transport costs in order that farmers will be able to access those bales at approximately €100 per bale. The reason it is not the full €75 is we must ensure the setting up of a system that encourages co-ops to drive the hardest bargain possible in respect of the cost of transport, for obvious reasons, as we do not want people to be profiting from this fodder crisis. I have committed to spending €1 million, essentially to ensure a reduction in the price of hay that is being imported for farmers of between one third and one half. In many cases, the price will be reduced by one half. As many people have questioned the reason only €1 million has been committed, I note this will buy 1,000 truckloads of hay, which is enough to feed 2.6 million animals for a day. These are the kinds of volumes under discussion. If we get to a point at which more than 1,000 truckloads of hay come in from United Kingdom and we need to consider whether the scheme should be extended, then we will do so. However, it is neither helpful nor necessary for me to start talking about more money. The issue is not money; it is logistics. It pertains to getting large volumes of fodder from the east coast of England to points all over Ireland and using the infrastructure we have in our co-ops, which covers every parish in the country, to get that fodder out of farmers and to manage this in a way that farmers are accessing it as they need it but are not over-accessing it, because other farmers will need it.
I reiterate, we had a really good meeting yesterday with the chief executives of all the co-ops and to give members an example of how seriously they are taking this issue, Stan McCarthy from the Kerry Group flew in from Chicago for the meeting. Moreover, all the other key co-ops also were represented. They have committed to ramp up significantly their efforts to bring large volumes of fodder and have agreed to an initiative on fertiliser because ultimately, this problem will be solved by growing grass and not by importing fodder indefinitely from the United Kingdom. At present we have a big problem because many farmers out of necessity have put animals out on wetland they normally would be saving for the first cut of silage. Cattle actually are trampling good grass into muddy ground, which has all sorts of negative consequences in terms of the availability of grass later on in the season and of silage for next winter. Moreover, it is not overly-nutritious for the animals either because they are grazing too early before there is any real swarth there. Therefore, both the Department and the co-ops are encouraging farmers to buy and to use fertiliser more extensively than they may normally do at this time of year, to try to get a real injection into the system to try to catch up, because the grazing season is approximately five weeks behind. Co-ops will make available interest-free credit for farmers next month for fertiliser purchases. They will extend credit facilities for farmers for fertiliser purchases, obviously within limits, to try to get an injection of grass growth into the system. Thereafter, let us hope we will get the weather to actually deliver on that but we must always plan for the worst. Were we to get another summer like last summer, we would have a continuing fodder crisis, even with some grass growth. Consequently, the Department is planning for this to such an extent that it now is talking to co-ops about bringing in more hay than is required for the next two to three weeks, which is the crisis period. The idea is farmers not only will buy enough roughage to feed their animals during this shortage but, even when grass is up and growing through the summer, enough will have been brought in to enable farmers to put some into storage as well as a security measure.
The co-operatives agree on that and they are buying into it.
In relation to banks, I also met all of the key decision makers for all of the Irish banks that are lending to farmers - AIB, Bank of Ireland, Rabobank ACC and Ulster Bank. They all were in yesterday and we had between an hour and two hours of a discussion. If one looks at the statistics on banking and farming at present, what is happening is quite revealing. For whatever reason - I have a fair idea what is the reason - farmers are not going to banks to deal with their credit problems. There are serious credit issues for farmers. There are very good prices, in terms of beef and milk. These prices are getting stronger and there is no reason this year cannot be a reasonably good year for farming, despite the really bad start. Banks want to lend money to farmers. They are confident that they will be able to get their money back. They want to make flexible credit facilities available to farmers. They are talking to me about facilities, for example, of making short-term loans available to farmers and not asking for any repayment until harvest time or until the single farm payment comes in. That is the kind of flexibility that they are happy to show to farmers. I want to hear from farmers whether this is merely talk or whether it is happening. For example, Ulster Bank has made €25 million available for a weather-fodder fund - €15 million of it in the autumn and another €10 million this spring - and the bank is saying the farmers are not accessing it. They want to make short-term loans available to farmers - an average of €19,000 was the figure given. They want farmers to come in and draw down that credit. Likewise, Bank of Ireland, AIB and Rabobank all have specific teams in place that they want challenged by farmers. If farmers are not getting the treatment they need, I need to hear about it and I will take an aggressive line for those farmers with the banks concerned given the kind of assurances that I have been given by senior staff in all of those banks. In terms of credit, there is a banking system ready and waiting. One cannot say the following about any other sector in the Irish economy, that banks want to lend to them. They are publicly stating that they want to lend into agriculture and farming.
If one looks at the statistics on farming in Ireland, half of farmers in Ireland have no borrowings at all and the others have by and large viable businesses. What we need to get over this particularly difficult period is access to credit at affordable rates with sensible repayment scheduling and from what I am being told, that is what banks want to provide.
There are other credit facilities available to farmers as well. On the co-operatives, for example, the largest co-operative in Ireland, Glanbia, has made an extra €15 million available to their customers this year. Connacht Gold has done something similar. It would not be quite as much because it would not have as much lending. At Dairygold, it is somewhere between €10 million and €15 million. The others are all the same.
Some of the co-operatives are giving interest-free credit because they want farmers feeding their animals and buying fertiliser to get grass growth because without the farmers doing so, they do not get the milk that they need. This is a commercial decision as well as a compassionate one. This is the big advantage of having a co-operative system in Ireland that can pull together in the interests of farmers, which is what is happening now.
There is significant credit available and there will be more in co-operatives, there is significant credit available that needs to be tested and drawn down within the banking system and there is credit available from feed merchants as well. In some cases, there are examples of farmers being charged significant interest for credit and there is no reason that should happen given the offers that have been made from the banking system and the co-operatives. I would encourage farmers to bear that in mind.
I do not want to pretend that, because of all that is being done, everything is okay here. It is not. Many farmers are extremely stressed and worried as to what the future holds for their animals. There are farmers selling animals because they cannot feed them. There has been a significant increase this year in the number of animals dying on farms. On the figures as they compare to last year, by the end of March, the date for which I have data, last year 83,000 animals died on farms in the first quarter and this year the number is 106,000. One needs to put that into context. There are 130,000 farms in Ireland. These are not figures on starvation. These are calves that are dying at birth. There is also a 3.5% increase in the number of calves in Ireland this year. Of course, the figures also relate to animals dying because they are not getting the nutrients that they need and, therefore, they are picking up infections, diseases, etc. There is an issue here.
There is a precedent. After 2009, which was the previous really bad year for farming, there were similar figures for deaths on farms to what there are at present but if one looks at 2010, there was a dramatic improvement after that, and we can deliver that improvement as well this time. The challenges are different from those of 2009, particularly from a fodder availability point of view, but if we can get over the next three weeks, this can be a year in which farmers can make their repayments and can make profits because prices are strong.
I am open to questions or suggestions. Obviously, we will consider suggestions. My focus, in terms of the money that we spend, is on getting fodder into farmyards to feed animals, not committing large amounts of money for a compensation fodder scheme or something like that. I heard calls for a €10 million fodder scheme. If we were to introduce a €10 million fodder scheme, we would have to do a number of things. First, we would have to take it from farmers from somewhere else because there is no new funding. Second, we would have to put a scheme in place for which we would have to get approval from the Department of Finance and the European Commission. We also would have to put a system in place to allow farmers to apply for those funds and we would have to put the necessary checks in place to ensure that everybody who applies qualifies under a certain criteria, in other words, there would be no payments being made until July or August at the earliest when, hopefully, we will have left this fodder crisis behind us. Instead of focusing on such a fodder scheme and all of the complexities and approvals around it, we have focused on turning around a targeted transport subsidy scheme - we turned that around in 48 hours in the Department - because that is what farmers, farming organisations and co-operatives were asking for. It is about making feed available in a crisis as opposed to making some grand gesture in terms of committing large amounts of money, which, essentially, I would have to take from some other sector within agriculture to pay for. We are dealing with the crisis at hand which is about getting feed from the United Kingdom into Ireland and making that available to farmers at an affordable price and in the quantities needed. We want to go beyond the crisis need to provide extra fodder so that we can settle the nerves for the rest of the summer in terms of the fodder issues. We are also focusing on ensuring that farmers can manage their finances and their credit through this awkward period where there has been an expensive winter which, hopefully, will be followed by quite a profitable summer and autumn because of the good prices to ensure that the credit and financial management around this year can work for as many farmers as possible.
Once again, if there are farmers who feel that all that is happening is just too much for them, then they need to call us and we will help them. They should not let pride get in the way of that. There is a lo-call number that I have given out on many occasions over the past couple of days, 1850 211 990, for them to do that.
That is what we are doing. If the members want us to do more or if they think we should be focusing differently, they should let us know and I will try to respond to that as realistically as I can.
I welcome the Minister. I raised this issue in the Dáil during Leaders’ Questions four weeks ago today. While the response has been too slow and late, I welcome the action the Minister has taken. The crisis is very significant. I disagree with the Minister as there are two crises, the first of which is the physical shortage of fodder. The Minister has spoken at length about that. It puts many farmers who are already in financial difficulty in a position in which they will not have money. Talking about giving more credit to people who do not have money does not solve the problem. I have been saying from the beginning that there is a twin problem.
I suggested some time ago that €10 million be put aside. Let me outline the normal practice in government. In 2009, we put €10 million aside for the flooding crisis that arose that autumn. As it happened, we did not use all the money; it was put aside as a contingency. A sum of €10 million from €1 billion is the equivalent of €10 from €1,000. Therefore, I have no doubt that savings could be found within the Department in this regard.
I accept in good faith the Minister's statement that he has put €1 million upfront. This is very good news. For the first time, the Minister has given an unequivocal commitment on this matter. The fund is for all those people who cannot afford to feed their cattle. The fund is to be administered through the district veterinary offices. I was seeking a similar scheme and suggested Teagasc but the Minister is to operate through the district veterinary officers. He has said that whatever cash is needed will be made available to people through the offices to ensure they can feed their cattle or sheep.
As long as the animals get fed and somebody has access to funding to feed them, I will be happy about the mechanics. If this had been said to me on 28 March, a lot of the grief and much of the pressure and hardship suffered since would not have been suffered. However, is fearr go deireanach ná go brách. I welcome the clear statement made by the Minister today. I encourage people to ring the helpline, whose number is 1850 211990, because until now people did not know what they would get bearing in mind the money problem.
I will not go into the anecdotal stories; we know they are true and that there are self-harm issues, etc., to be borne in mind. I do not want to take up the time of the committee. We all recognise that there is a very serious crisis.
The Minister has answered a number of the questions I had anticipated asking. He said the price to the farmer of a large bale of hay imported from Britain, with the transport subsidy removed, is approximately €100.
Can I just explain that? It may well be the case that we can get large bales of hay to people for less than that but the reason for the expense is that the hay is coming from Kent.
This is why it costs €75 per bale and €1,500 to transport 20 bales. If we can source it cheaper, it will be cheaper for the farmers. We are covering €50 of the €75 transport cost. If cheaper transport can be found, we will still pay the €50. It is approximately one third.
I compliment the IFA on its work in trying to source feedstuffs in Britain. The more people who can obtain good-quality feedstuffs, the better.
Could the Minister confirm that the price referred to is the equivalent of €50 for a big bale of silage wrapped in black plastic?
It would be less. There are approximately four round bales in one of the big square bales.
Let me give the exact figures on the aid so members will be very clear. The contributions towards international transport costs, which will be reflected in the price charged to farmers, will be €50 for the 8x4x4 bale, the large bale, €30.50 for the 8x4x3 bale, €25 for the 8x4x2 bale, and €25 for the small 4x4 bale. The contribution for the round bale would be approximately €33.
I am talking about the comparison with the round bale of silage. There seems to be a dispute in this regard among farmers in Ireland who know a bit about the matter but I will leave that issue to them.
There are many farmers who do not deal with dairy co-operatives. They have no track record with them, nor do they have any credit facilities with them. The dairy co-operative does not have a milk cheque to set against the price. In some parts of the country, there are no dairy co-operatives. What are the arrangements for the affected people?
Will the banks continue to lend to those who have already exceeded borrowing limits, who are in trouble with the bank manager and who are in trouble their overdraft? Have the banks given the Minister clear assurances in that regard?
I accept the Minister's point that he will feed the animals directly. I do not care how the animals get fed if they are fed. The farmer will be happy to see the animals fed. To whom must one apply? What information is required by the officials when one seeks assistance? How much assistance is available to farmers? How does the system work? Must the farmer in the circumstances I describe ring the helpline or go to the district veterinary office? This needs to be absolutely clear and the message must be sent out to farmers.
The Minister stated he will operate on an open-cheque basis. I accept that as it is fair enough. In the heel of the hunt, the funding I suggested a month ago will not be far off the funding that the Department will have to find. So be it.
The Minister said funding will be made available, if necessary. The Minister quite rightly pointed out that commodity prices, including for milk and beef, are quite good at present. Has any pressure been put on the factories and dairy processors to raise the prices of milk and meat so the producers will get a better income? It is fine to keep lending money to people and taking it back from next year's cheque, but this means that the producer will have to pay this year's costs next year in addition to those of next year. He will discover the solution was only temporary.
The Minister gave details on payments. With regard to agricultural scheme payments, what percentages are paid in respect of 2012? I refer to the single payment scheme, the disadvantaged areas scheme, REPS 4 and AEOS 1 and 2. With regard to the first two, I believe the percentage is fairly high. With regard to the suckler cow scheme and all the other schemes pertaining to 2012, how far down the line are we in getting the cheques to farmers? The Department could definitely send out cheques to people to whom they are due.
Many have asked about prepayment under the disadvantaged areas and single payment schemes, for example. I understand this cannot be done because of EU rules. Will the Minister confirm whether there is any possibility that permission could be obtained, either under the national or EU-funded schemes, to make significantly earlier payments this year? I do not mean a week earlier in the autumn.
In the longer term, there will also be consequences for people who are destocking animals where they reduce the herd because they cannot feed them. In addition, they anticipate that because of the late spring this year - and the issues the Minister highlighted, including fertiliser - they will not be able to feed the same number of stock next year either, so they will be destocking. Has the Minister had discussions with the Minister for Finance on that matter because there are major tax implications for some farmers in destocking?
I understand that many other people want to speak so I will finish there.
I thank the Minister for attending the committee and for his presentation. We are out of the blocks late, although that is not a personal criticism. This matter was evident going back to late February when we had a continuous easterly wind for six or seven weeks. In addition, the water table was excessively high as a consequence of a wet summer and wet winter. Marginal land in the west and south west has been particularly badly hit as a result of the adverse weather conditions. We will be so far behind when it comes to harvesting silage later this year that farmers will be a crop down at least. This will continue on into next year and the difficulty will not go away in the short term, given the amount of cattle in the country.
The banks want to lend but to whom will they lend? Will they lend to people who have difficulties as it is, including small farmers? The Minister said co-ops will give interest-free credit, which is welcome, and so they should because they are the main beneficiaries of the producers. It is about time they put something back into it. I welcome the fact that the Minister has got all these people together to alleviate the current situation.
A sizeable number of small and weak farmers will have difficulty in approaching banks for money. Such people may traditionally have had 15 or 20 sucklers, but they have been badly hit. They now find they have spent whatever money they had to buy animal feed.
People in difficulties are being totally exploited by fellow farmers. I know of cases where round bales of silage were sold for €55 to €60 per bale. The same silage was worth approximately €25 to €30 per bale, so that is exploitation yet nothing has been done about it. I do not know how they can live with their consciences having exploited their fellow small farmers who are so vulnerable at the moment.
The IFA and other farming groups are trying to make a connection with such farmers who may be too proud or shy to seek help. They will slip between the cracks unless somebody makes that connection, but we need some form of structure to achieve that.
While the €1 million fund is welcome, I agree with Deputy Ó Cuív that it may be totally inadequate. It is a start, however. I welcome the Minister's statement that more funding will be made available if necessary, which is encouraging.
The only way we will solve this is to work collectively with farming bodies and those with political responsibility to represent the communities we are speaking about. It must be remembered that people are selling off cattle at the moment for prices that are collapsing. A farmer with finished cattle is okay because factory prices are good, but those with yearlings or 18-month-old cattle must sell them for €200 or €300 less than this time last year. The consequences of that will be felt as we move forward.
In addition, we are going to lose the first crop of silage in marginal land. If farmers have any drying they are putting cattle out on what would have been their silage. I know people who have been spreading fertiliser for the last five weeks but it is a total waste because it is gone. That means they need a second fertilisation of their land in order to get growth. There was no growth there for seven weeks and it has only been there for the last couple of days when the wind went around to the south-west with a bit of rain. Before that there was nothing. I am driving around the country every week and can see fields that are burned because there is nothing there. That needs to be taken into account, given what we have been through and the consequences that will arise later this year.
I thank the Minister for his presentation. The allocation of funding is welcome as is the Minister's acknowledgement that it will have to be a rolling fund. These emergency provisions will have to remain in place well into next year because this crisis will not ease over the next couple of weeks. It will not be resolved quickly.
We have all heard the banks saying they are willing to lend money, but in practice that has not happened. The barriers that have put in place for people trying to access credit mean, in effect, that they cannot access it at all.
The Minister said the Department will not allow animals to go without feed and that he will arrange for them to be fed. What is the process for farmers to access that feed? Perhaps the Minister can outline the steps in that regard. I imagine that if a farmer can access credit from a bank or co-op, the Department would not consider feeding those animals. What will farmers be required to do to get that aid in cases where it will be very necessary?
The Minister said he has been planning for this since last autumn and was aware that the issue was coming up. We have all heard stories about cattle starving to death in the fields, yet the response is only kicking in now. How quickly will farmers get feed if they need to access it? Will they be required to demonstrate that they cannot get it from their own resources before the Department steps in to provide it?
I welcome the Minister and thank him for briefing us on the fodder issue. The main point he mentioned is true - this is not a financial issue, it is about the lack of fodder. As others have already pointed out, it goes back to the bad weather last summer. In the coming months, for the first time ever, there will be no surplus fodder left in the country. In recent years, a certain number of farmers would always have silage, hay or straw left over, but for the first time ever that will not happen. It will therefore have a knock-on effect for a number of years. The newspapers usually carry notices of hay for sale but that will not happen any more.
Teagasc will have to become involved in management and planning for the coming years to try to alleviate the problem. It is a management issue from the farmers' point of view. For example, if a farmer is normally used to feeding 100 cattle for the winter, yet only has feeding for 70, he will have to sell off cattle in advance. There is no point in keeping 100 cattle if there is no feed for them, because somebody else may be able to feed them. That situation will have to be managed in a proper and efficient way in the coming period to alleviate the problem.
Deputy Ferris mentioned farmer exploitation and there are no better people to exploit one another than farmers. We all know that. One can see farmers around the country paying €300 an acre for conacre grass, which is madness. This has been going on for years but it has not changed and will not change. It is not a new phenomenon and we all know that.
Fertiliser is a big issue. As was mentioned earlier, fertiliser is normally spread at the end of January or in early February in the eastern part of the country in particular. However, it was done this year but with absolutely no effect.
It is going to have a knock-on effect, notwithstanding the fact that milk prices are reasonably strong at the moment. Our yields are down significantly due to the lack of grass, which means that while one is getting a better price, one does not have the same volume of production. That will also have a knock-on effect. There will be extra costs involved.
I welcome the fact that co-operatives are providing interest-free credit for fertilizer. Glanbia is providing interest-free credit between May and July. This will all depend on the weather. We need a good spell of decent, mild weather in the coming period. Unfortunately, the weekend is forecast to be bad, which will not help. If we do not get good weather and the opportunity to grow grass, we will be in serious trouble. Teagasc must play a significant role in planning for next winter and advise farmers about how to manage the feed stocks they may or may not have for next and the following year.
I welcome the Minister and thank him for the briefing and for keeping the committee updated during the last few difficult weeks. I welcome the move to keep pressure on banks. It is very important that banks lend money to help those people who have difficulties. The moves by co-operatives to bring in fodder are also very welcome. Connacht Gold has compounded a cheap ration, which I referred to the other day and which will cost approximately €240 to €250 per tonne. It will be a major help along with roughage, which is also very important. For people who have a bit of roughage land for cattle also, the compound ration will help to alleviate the problem.
I compliment my colleagues in the IFA, some of whom are in attendance, for their work over the last number of days. We all worked like that in difficult years previously. The more fodder, hay and people who work together, the better it will be. There is a serious problem with fertilizer. I have some at home in a shed which I could not spread due to the risk of rain. If one spread it, it might have been washed away and in any event it would have been lost as there was no growth there. We hope that there will be some mild weather.
I welcome the move to fast-track AEOS payments due to farmers. I received calls this morning on the way to the committee and am aware that there is a small number of farmers who had a problem with their disadvantaged-area application and single-farm payment last year. They have been penalised or their payments held up. It is their own fault as farmers sometimes throw a letter on the dresser and do not respond to it. They are now under pressure and wonder if matters can be sorted out. I will be in touch with the Minister's office to sort out a few problems that are there. We must all work together and hope the weather improves to provide a bit of growth.
I thank members for being constructive, which is helpful. It has been suggested that there are two problems, namely, fodder and money. I accept that money is a problem for some farmers, but the main priority for farmers across the country is to feed their animals. That must be the focus of the funds we have available to us to spend. The emergency welfare fund is about feeding animals that will otherwise not be fed, for whatever reason. We are less interested in the reason and more interested in ensuring the animals are fed. We will then work with owners to establish why it was necessary. Obviously, we want to get large volumes of fodder into the State by getting a real drive going through co-operatives, which is what we are doing.
On the money issue, I have got a very strong sense from co-operatives, banks and, to a certain extent, feed merchants that they will make extra credit available even to people who have reached credit ceilings to get them over this particular crisis. They are not going to let animals starve due to a lack of credit. If I thought access to credit was a major problem, we would look at addressing it. All of the indications I have received from banks and co-operatives are that credit is available even for people in difficult financial situations to buy feed to get farmers and their herds over a difficult period and into a normal growing season. I am not talking about remortgaging houses or rescheduling machinery loans. If credit is not available and people cannot feed their animals, they should contact us and we will feed them.
A number of people have asked how the system works. We have deliberately left the system as it is to allow our DVOs to use their common sense. We set up an animal welfare hotline some 18 months ago as part of the Department's animal welfare initiative and in the context of the legislation the Houses of the Oireachtas spent many hours debating. It allows members of the public to pick up the phone and express to departmental officials concerns about welfare situations in urban and rural areas, including where farm animals cannot be fed. If farmers themselves have concerns about the welfare of their own animals where they cannot afford to keep them, they can also use the hotline. We will respond. The line is open until midnight every night. If no one answers, we will revert to a person who leaves a message within half an hour. The line is being monitored all the time. I have had some of my staff test it to ensure that it is working and we have assigned extra staff due to the significant increase of activity on the line. Where a person expresses concern, we contact a local DVO and a vet will go to talk to the person concerned.
This is not an attempt to catch people out or attribute blame, it is a welfare response. The last paragraph of the note which has recently been circulated to DVOs may give members an idea of the kinds of actions we are taking. It sets out that this is a short-term measure. It recommends that arrangements for delivery of circa ten bales of silage or ten bales of hay - though this could vary depending on the herd size - or equivalent feed value concentrate be made immediately for farmers in need. It suggests that a limit of €500 to €1,000 can be authorised by the local veterinary officer and an invoice sent to the Department. This is about the immediate injection of feed into a farm that needs it to ensure animals do not starve. We are working with all sorts of people to ensure that we can access the necessary feed. If someone contacts his or her local IFA representative or other farm organisation, those bodies can approach us and we will follow the matter up. If people contact their Teagasc advisors or local DVOs, the mechanism can also be triggered. We are here to help people who are in extreme situations.
I will not allow any animal to starve if the Department is given notice and can intervene. It is what we are trying to do in the Department. Whatever it costs, it costs. I will have to find the money in our budget and if we have to take the money from other schemes, we will. It will not cost that much as our programme is targeted on individual cases. Whatever money is needed will be made available. The system is deliberately a flexible one to ensure that veterinarians and authorised officers are not prevented from responding due to a technical qualification criterion. We want the scheme to be flexible to ensure that we can respond to urgent situations. That is necessary in many cases. We know the farming community very well in the committee and that many farmers wait until the last minute to call for help. We must, therefore, intervene quickly to ensure we put the necessary assistance in place.
The question of non-dairy co-operative customers is an important one.
Many have asked me if Dairygold or Glanbia would help a non-dairy co-operative customer. We have received a clear commitment from the chief executives of the co-ops that everyone in their catchment areas will be helped as some dry stock farms are faced with difficult circumstances too. Many dry stock farmers will have accounts with co-op agri-stores and will be able to pick up what they need from them. In Dairygold’s case, it had been limiting its stocks to one bale per farmer which would have fed about 130 cattle for a day. It had to ration stocks to ensure there would be enough supplies for everyone. I hope that will change in the coming days. In the note I received an hour ago all of the co-ops are ramping up the volumes of fodder they are bringing in.
There was a request of an advance payment of €1,000 to every farmer in the disadvantaged area scheme, DAS, and the single farm payment scheme. It is important to be realistic about this. My Department is not a bank. The total for such advance payments would come to €100 million, a cost we cannot carry. I do not have it and would have to ask the Department of Finance to give it to me five months before it should paid. My Department would then have to carry the bridging cost. We do not have the facility to do this. However, if I could do it, I would.
I met the European agriculture Commissioner before a Council meeting this week. I informed him about our fodder crisis and made it clear Ireland would be applying for early payment of the single farm payment. I hope half of the payment will be made six weeks earlier to improve farmers’ cash flow in the autumn. Everyone knows, however, that DAS payments are made in September every year around the same time as the National Ploughing Championships. If I could, I would bring forward the payments. However, I cannot raise expectations on something I cannot deliver. We will pay out early on those schemes on which we can such as the AEOS, the agri-environment options scheme. In the next ten days to two weeks we anticipate paying out €2 million in AEOS 2 payments. We paid out €500,000 last week to 800 farmers in AEOS 1 final payments. All of these were problem cases which required clarification.
Deputy Ferris commented on farmers exploiting each other. It is important to balance that comment by saying there are many farmers who are giving their neighbours fodder free of charge. Much of this is being facilitated by farm organisations. I can name many farmers in my area who have been feeding their neighbours’ animals for three weeks already and have not charged them for it. I accept there is some exploitation, with people looking to profit from other people’s misery. That should not be happening, but that is what happens when one has a market in which there is massive demand and little or no supply.
The waste of fertiliser is an issue. Farmers have had to pay a fortune to feed animals they would normally be feeding with silage. The cost of grazing animals at this time of year should be about 50 cent a day per animal as opposed to €4 per animal per feed ration. That is a big difference and it is costing the sector a fortune every day. Even with all of this, the banks still want to lend money into the system, as they think this can be a profitable year for farmers who will be able to pay off their debts. The banks are also stating that if a farmer cannot pay off this year, they are willing to put repayment schedules in place in the next 18 months to two years. Ulster Bank’s proposal in its weather fund has a standard 18 month repayment period rather than six to seven months. I encourage farmers to test the banking system. If what the banks are telling me is not happening, I need to know about it and I will publicly highlight it, if it is the case. I can understand the scepticism around banks, but that is the case across so many other sectors too. It is one of the reasons farmers are not engaging with their banks on this issue.
I agree with Deputy Deering that milk volumes are down. It is in everyone’s interests to get grass growing. That is why we need to make fertiliser affordable and available through credit. Everyone recognises that solving this problem is like solving Ireland’s wider economic problem and doing so will help grow the economy. This is about moving away from emergency measures of having to import from the United Kingdom and growing our own grass. We grow grass better than anyone else in the world. Teagasc has informed me today that it is switching its advice focus not only on fodder management but also on financial management in getting over this credit problem for farming. I encourage farmers to speak to their Teagasc advisers, as well as private agricultural advisers.
I know Connacht Gold has made a product available which is cheaper than ration would normally be. That is a useful and good response to what is happening. However, animals need roughage too. One cannot feed animals on pure meal alone. That is why many farmers are mixing meal with straw. It is a stopgap measure but not the solution we need. We need grass, hay and haylage.
I welcome the Minister and his officials. I believe the Minister dropped the ball a number of weeks ago. Many Members were calling in the Dáil for action to be taken earlier several weeks ago. While I welcome wholeheartedly what has been put in place, it should have been happening a number of weeks ago.
There is the practical problem of farmers feeding their animals every day. There is another problem which has not been spoken about at the committee - the psychological pressure farmers are under. One action the Minister can take today is to instruct that all farm and forestry inspections temporarily cease until such time as the crisis is over. I am not suggesting farmers would do anything wrong. Like a hole in the head, what a farmer needs least is a farm inspection. If the Minister was to state today that, to assist farmers with the psychological trauma they are going through, he was instructing his officials the length and breadth of the country to temporarily stop farm inspections until the crisis was over, it would be a positive measure.
I would be very grateful if he could respond.
I wish to put on record that the Minister is well on top of the issue and should be complimented on that. He asked us for genuine suggestions in respect of it and I will put four very brief ones to him. Will he look at leasing a ship, bringing it to Kent, which is well serviced by ports, and shipping fodder from Kent to here? This would significantly reduce the price of fodder. Will he access the EU solidarity fund? Funding has been used in the past specifically through Teagasc where the Minister dealt with farmers on an case-by-case basis. It was very successful in the past. He could access the EU solidarity fund to deal with issues in particular areas, for example, in Clonown in my constituency where they have now lost four consecutive years of meadow because of flooding of the callows. There is a significant problem with feed and fertiliser merchants who cannot access credit. They cannot pass it on to farmers because they are already overextended and something needs to be done in respect of that. I commend the Minister on looking at the advance buying of fodder because these weather conditions could continue for a number of weeks or months. I suggest that the Department should actively engage with NAMA to access some of the NAMA warehousing to centrally store some of this forage in advance of when it is needed. While it may be shipped in by Dairygold at the moment, in six weeks time, the crisis could be in the west or north east of Ireland. Fodder could be accessed at a number of storage facilities held by NAMA around the country and shipped to wherever it is required in a couple of weeks' time.
I thank the Minister for his explanation. There is one thing I need to get clarification on. When he says he is committed to covering the cost of importing the hay, which is €50 out of transport costs of €75 in the case of the big bales, how will that happen? He has explained about credit and getting meal. A man contacted me yesterday. Prior to hearing that his costs might be covered for transport, he and a neighbouring farmer spent €1,200 on importing hay. This person is wondering how he will be able to avail of this subsidy.
Deputy Naughten raised the crisis they have every year on the Shannon callows. At what stage will the Government put the NPWS back in its fundamentalist environmentalist box and tell it that sometimes there are bigger priorities than snails, flies and butterflies? There are people who are at the end of their tether not during this crisis but in the last year and years before that who seem to come last below all species that live in the area.
My final point concerns the feeding of horses, donkeys and ponies. Where I come from, I received a call four or five weeks ago from concerned people about the fact that a horse was found dead in a field with an emaciated horse beside it and another horse was thrown in the woods about 300 m away. A significant number of people contacted me about it because it was the side of the main Dublin road. I do not keep horses and do not know enough about it but the consistent message given to me was that there needs to be some sort of systematic cull or some system put in place whereby many of these animals can be put out of their misery. I know it is not ideal but I do not think it fair that they are hanging around in an emaciated state in fields because people who bought them with their best interests at heart do not have the money to take care of them. What can be done in this area because it is a massive problem?
I also welcome the Minister and his official. I assure the Minister that he will never have to check on his official or those like him because they are always working hard. I certainly welcome the €1 million fund. It is a start but it is only a drop in the ocean. I thank the IFA and other organisations, such as Coolmore Stud in my own county which did not export fodder but recently sent it to Clare and the west. We should have seen this problem coming. Coming on the back of a long wet summer, cattle are in for nearly 12 months and we do not have a great deal before that either. I do not agree with my colleague beside me that the Government acted in time. It was way too late. Deputies Ó Cuív and Healy-Rae and I, along with others, have been raising this issue for five or six weeks. Any of us who knows anything about farming knew there was no growth given the temperatures. Indeed the temperatures are still forecast to be very low for the next number of weeks.
I am alarmed. I heard the Minister, for whom I have always had great respect, say on Saturday morning that the banks were ready, willing and able. That could not be further from the truth. I would go along with Deputy Healy-Rae's argument that farm inspections should be stopped. I would then ask farm inspectors to attend at the banks with farmers because there are forms to be filled, the managers with which they deal are gone and all relations between most businesspeople and banks have broken down. We know that. As was said by Deputy Naughten, the merchants are totally overextended with regard to credit so there is a significant problem there. The Minister must bring the Department of Finance into it. He said he had to go to the Department of Finance. The Department of Finance should be in this because this is a national issue and because farming is the area that brought us out of previous recessions. This is demoralising and depressing for farmers and their stress levels are huge. I ask the Minister to send inspectors to chaperone farmers at the bank and see how far they get. Most of them will not get past the counter because the banks do not want to know. They are already removing their overdrafts. That is my experience and I am in business as well.
I will. It is having a huge knock-on effect. It is 25 April. The Minister knows that in his county, silage has not been cut. It will not be cut for at least another three weeks and will have a significant effect. This is not going to go away but will continue into next winter and be very serious. The disadvantaged area payments have to be released and the Department of Finance must become involved because this is a major crisis and bigger than we think. We must get the Department of Finance and the Taoiseach to understand how serious it is and deal with it because the rest of the economy is depending on farming.
The focus of a number of questions has been the charge that we have been doing nothing. We have been working through knowing that fodder management was an issue since last September. It is not a question of responding to calls in the Dáil two weeks ago to do something. We have been working with farming organisations and through Teagasc, our veterinary offices, dairy and beef discussion groups-----
The charge that we have been doing nothing on the fodder crisis is nonsense. Everybody, including farm organisations and co-operatives, was managing this through a difficult winter but everybody was anticipating that we would have some kind of normal spring beginning about a fortnight ago. When that did not happen, we had to kick into a new response because all of a sudden, there was a fodder access issue - we had literally run out. We are now responding to that in as comprehensive a way as we can. The point I am making is that the level of the commitment by Government should not be measured in terms of whether there is a €1 million fund available. What we are doing is targeting money where it is needed, which is to support the importation of large volumes of fodder, to make that available to farmers at affordable prices and to ensure they can get the credit to buy it if they need it. If we need to go further, we need to go further. That is why I have said in terms of the welfare fund that if animals are starving in parts of Ireland, I want to hear about it and we will intervene. We will make that work regardless of the cost consequences.
With the exception of the transport subsidy, two or three weeks ago we were trying to increase the pace at which we were making payments because I knew farmers were stressed. Approximately ten days ago we instructed inspectors to be more careful in how they approached and treated farmers. We have a legal obligation to ensure the rules are kept. That is linked with single farm payments, disadvantaged areas payments and all of the other payments provided through the European Union. We have to inspect farms, but we are doing what we can to avoid putting pressure on farmers in the inspection process. If I simply cancelled inspections for the next couple of weeks, I would be audited by the Commission and the committee would then be asking me about disallowances, or fines, because the Commission had refused to pay money linked with schemes in respect of which we had not properly implemented the rules. I have to implement the rules, but I have made it clear to inspectors that they are to treat farmers with respect, which they should always do, and sensitivity, given the stress they are under. Sometimes when a crisis emerges on a farm, inspections can help because if inspectors are doing their job properly, they can bring back information that will allow us to respond.
We have had a discussion on shipping fodder. Instead of importing individual lorryloads of hay, I am anxious to transport a couple of shiploads into Cork, Galway, Waterford and, perhaps, Killybegs or on the east coast. I have asked the CEOs of the co-ops to consider this option and we had a conversation on the issue yesterday. It is a more complex logistical exercise because it requires the co-ops to act collectively rather than use their own transport systems. They will revert to me within the next couple of days with a response on increasing significantly the volume of hay being imported. That matter is under consideration as part of the mix. My Department does not have the logistical capability to do this, but a big company such as Glanbia or Dairygold does. The business of such companies includes management of their transportation systems to collect large volumes of milk on a daily basis and deliver feed. That is why we are working through the co-ops.
If it is possible to access funds from the EU solidarity fund, we will try to do so. It would be dangerous for me to raise expectations in that regard, however, because I have been through many debates in which people have sought money under that fund. Normally it is sought in response to massive forest fires, widespread flooding and other extreme weather events and natural disasters. Many countries in Europe are dealing with fodder shortages. This is not the only country to have a delayed spring. I do not know whether we can successfully argue a case for accessing the solidarity fund on grounds of a fodder management system that is out of sync with the weather. We will investigate our options and if it is possible to draw down funds, of course, we will not leave anything behind. However, I would be slow to raise expectations around the fund because I know it is difficult to access.
We have had a conversation with the banks about merchants receiving credit. I understand the issue is not significant. If members have experience of cases that show otherwise, I have a direct contact in all of the main banks and will pursue the issue. There is a genuine understanding a credit issue has emerged in Ireland and money has been made available to address it. The banks have assigned teams of people to meet farmers and fill in forms with them rather than throwing them a form of ten or 12 pages. That is what I have been told and I want to test the commitment I received yesterday. It is easy to beat up the banks for obvious reasons, but in this instance I have received strong commitments on providing the financial assistance and credit the farming community needs. I can only take such commitments at face value and encourage farming organisations to test them.
As regards having a centre for storing fodder, we have thought about this option, but I want the co-ops to manage storage. If they have fodder that is additional to demand, I want them to store it. Most of them have indicated that there is no issue in this regard because they have extensive storage facilities located close to farming communities. I suspect there will be demand for everything we bring in, even if we dramatically ramp up imports because farmers will want to store extra hay as an insurance measure, particularly if they can access feed at affordable prices.
In regard to the operation of the transport subsidy, farmers will fill in their forms in the co-ops. I witnessed one such transaction in Dairygold last weekend. The co-op will bring in a load of hay and farmers will arrive with their tractors or jeeps to get the bale. Who gets what will be clearly calculated. We have to give the subsidy to the farmer because there will be issues with European competition law if we give it to the co-op. The farmer will receive credit or a cheque to the value of the transport subsidy. In other words, the price will be reduced. Most farmers have accounts with co-ops and their accounts will simply be credited if they fill in the forms. That is why we are using the co-ops. I have advised farmers who club together to import large volumes of hay from the United Kingdom that we cannot give them direct subsidies because we would lose control and management of the situation.
Yes. My officials spoke to the CEO of Connacht Gold today. If farmers or buyers groups can source fodder from the United Kingdom, they should do so through their co-op. I understand the co-ops will try to facilitate them in drawing down the subsidy.
A two-pronged issue arises in respect of horses. First, horses are left to forage for themselves in fields lacking grass and, second, blatant cruelty is evident in some cases. We are trying to act on this issue. My Department has never been as busy in this area, not only because people are reporting more but also because we are taking a more proactive and aggressive approach. We work with local authorities and culling is happening in some cases where animals are in such an emaciated state that the humane thing to do is to put them out of their misery. However, a property rights issue arises because these animals are owned by somebody. The State cannot simply confiscate them and put them down before going through a process. In some cases animals are claimed by their owners after we pick them up only to be picked up again a couple of weeks later. This is a difficult issue to address. We have new legislation with the Animal Health and Welfare Bill 2012 which will be enacted presently.
By the start of next month we will also have our new, centralised database for horses in place. That will not be the perfect system but is the first step towards a much better system whereby the agencies that can grant passports will all contribute to a central database. We will have that central database and will then move onto the next step to continue to improve that system. That will help us to know who owns the animals and where they are. We have learned many lessons during the horsemeat scandal and we have done much thinking about how we can improve the area of horse identification and passports, although that was not directly linked to the horsemeat scandal but was a policy byproduct of it. Members will see much change there in the coming weeks.
I do not want to comment on NPWS because we are dealing with the fodder issue today. If Deputy Mattie McGrath knows of farmers who are going into banks and are not getting a service or the support they need, I need to hear about it and we will follow up on it. As I said before, I take seriously and at face value the commitments I have received from banks. I appreciate that commitment because it is significant and I encourage farmers to test that. If it is not happening as it should, I need to hear about it and we will take a very public and critical line on banks if they do not follow through on the promises they have made to me.
I thank the Minister whose 40 minutes turned out to be 60, so he is under pressure. I thank him and his official for coming here today. If there are ongoing developments, maybe they could brief us by a circular to the committee.