Oireachtas Joint and Select Committees
Wednesday, 2 October 2013
Joint Oireachtas Committee on Foreign Affairs and Trade
Trade Promotion: Discussion (Resumed) with the Irish Farmers Association
I remind members, witnesses and those in the Gallery to ensure that their mobile telephones are switched off completely for the duration of the meeting because, even in silent mode, they can interfere with the broadcasting equipment.
Today's meeting is an important part of our work programme. I am delighted to welcome the president of the Irish Farmers Association, Mr. John Bryan, to our meeting. He is accompanied by Mr. Kevin Kinsella and Mr. Pat Smith, general secretary of the IFA. Farming activities are extremely important. This has been a very good year for farming. There were large attendances, the highest numbers on record, at the ploughing championships in County Laois last week. The food processing sector and food exports are a major growth area in the economy and one that offers huge potential for trade. It is that context we have invited Mr. John Bryan and his colleagues from the IFA to make a presentation to the committee. As they will be aware, the committee is preparing a report on trade, our relationship with the Department of Foreign Affairs and Trade and how trade promotion is working in that Department. The IFA has an important role to play, given the important role food plays in the economy.
We are delighted to have Mr. John Bryan in today in his capacity as president of the IFA. Apologies about last weekend and that Kilkenny was not in the All-Ireland but Clare did the bit over the weekend. However, I am sure Kilkenny will back again in the near future. I hand over to Mr. John Bryan.
Mr. John Bryan:
It was nice to see Clare win. We will loan the cup for a year or so, and hopefully it might only be "or so".
I thank the Chairman for inviting us to the meeting and we appreciate the opportunity because the IFA considers trade to be very important.
I wish to focus mainly on the opportunities and challenges that face the agrifood sector in the international market place, as the sector prepares to expand. The economic downturn has clearly shown that as a small open economy, Ireland's recovery is being driven by the exporting sectors, with the agrifood sector as a key player. The agrifood sector accounts for more than 60% of Irish owned exports, provides enough food for 30 million people and is underpinned by production at farm level. Farming, the food industry and the services industries support an estimated 300,000 jobs across all regions of the country.
Since 2009, Irish agrifood and drink exports have grown by more than €2 billion. In 2012, despite the farming community facing severe weather conditions and the resulting fodder crisis, exports reached a record level of more than €9 billion for the first time. The value of exports in the first six months of 2013 have shown a further 8% growth, with predictions by Bord Bia that we will reach €10 billion this year. This comes at a time when Ireland is experiencing a general fall in manufacturing exports. Ireland's agricultural exports are mainly driven by our beef and dairy sectors, where we export over 80% of output. In addition, sheep, pigmeat and horticulture exports are also very important and contribute significantly to gross agricultural output, GAO.
Under Food Harvest 2020, the strategy for the agrifood sector, an export target of €12 billion has been set. It was intended to reach it by 2020. At the time, the Minister for Agriculture, Fisheries and Food was Deputy Brendan Smith. The IFA was very supportive of the target. At the rate we are going we will reach the target sooner, which is important for the economy. The ambitious target is underpinned by growth in output and value of primary production as well as strong growth in value-added food products. The progress and growth of the past three years demonstrates we are on course to achieve these targets.
According to United Nations projections, the world population will grow to 9.6 billion by 2050. To meet food demand, the Food and Agriculture Organization, FAO, is projecting production would need to increase by more than 60% over this period and more likely between 70% and 80%. This massive growth will undoubtedly create major new market opportunities across the word for a food exporting country such as Ireland. The end of milk quotas in 2015 will provide a great opportunity for our low cost, grass-based producers to expand production. With our grass-based production systems, agriculture in Ireland is more sustainable than many other exporting countries. As consumers and policymakers become more conscious of where food comes from and how it has been produced, this is an advantage on which we can capitalise further into the future.
A number of initiatives have been developed to capitalise on our green image, in particular the sustainability of our high quality food and drink exports. Bord Bia has developed a sustainability charter, Origin Green, to help Irish food and drink suppliers drive their exports. Ireland is a country well suited to sustainability with one of the lowest carbon footprints in the world per kilo of beef or litre of milk produced. A key challenge for the Government is that the proposed climate change legislation would not stifle the opportunity for sustainable growth in the agrifood sector. In addition to the growth in food exports, associated businesses in agri-engineering are also expanding rapidly.
Last year, I participated in the agrifood trade mission to China led by the Minister for Agriculture, Food and the Marine, Deputy Coveney. Irish agrifood and related exports to China have grown in value, from €167 million in 2010 to €323 million in 2012, an increase of 93%. With a growing and increasingly urbanised population, I saw at first hand the opportunities that are emerging in new markets like China for higher value, protein-based products. There is huge pressure in China due to the shortage of water. The country has no capacity to feed its 1.3 billion people. During the trade mission, a memorandum of understanding was signed on agriculture and fisheries co-operation between the Ministry of Agriculture of the People's Republic of China and the Department of Agriculture, Food and the Marine. This provides a framework for the strengthening of the bilateral relationship between Ireland and China in the area of agriculture and fisheries.
Our ambassadors, embassies and agriculture attachés have a hugely important role to play in terms of trade promotion and market access for our agriculture export products. It is critical that the positive image of Irish agriculture and Irish food production is reinforced at every opportunity. By doing that, familiarity with and knowledge of the Irish food sector will grow and we will have a head start on capturing new markets. Agricultural attachés have a particularly important role to play by working directly with importers and departments of agriculture abroad to establish market access for Irish produce. As part of its business, the IFA travels a great deal around the world and we work closely with the Irish attaché in the United States and other areas to meet companies interested in purchasing Irish food. It is important those attachés are retained. Our seven agricultural attachés, who have an in-depth knowledge and understanding of the agrifood sector, are particularly important in dealing with complex issues such as market access and veterinary certificates for both existing and emerging foreign export markets. They also have an important support role to play as ambassadors in trade promotion and information briefing. The embassy structure is very important in facilitating access to customers for commercial food companies. Bord Bia, the Irish Food Board, plays a vital role in the promotion and marketing of Irish food and drink across the globe. It has overseas offices, strategically located in London, Paris, Milan, Düsseldorf, Madrid, Stockholm, Shanghai, Moscow and New York. Bord Bia works hand in hand with our ambassadors and embassies.
The EU, especially the United Kingdom, is and will remain Ireland's most important trading partner for the agrifood and drink sector. We must continue to focus on increasing our market presence and the value of the food we export into the EU market. The promotion by Bord Bia of Irish beef in the German market has led to an increase in the value of exports to this high value market of €72 million or a fivefold increase since 2009. The decline in food production across other member states in beef, sheep and pigmeat presents an opportunity for increasing Irish exports into high value markets. Trade promotion initiatives must continue to be strongly driven within the EU market.
The IFA has a clear view of the opportunities and threats that relate to trade. We have always maintained that a level playing pitch and equivalence of standards is very important. In that context we have concerns about some of the trade negotiations. With the ongoing failure to reach a conclusion to the WTO multilateral trade talks, the EU has pursued a policy of bilateral trade deals. While these deals can provide opportunities for both parties, it is critical that trade agreements are not pursued which would undermine the competitiveness of Irish food production, with negative consequences for producers, consumers and employment.
In particular, the IFA has major concerns over the damaging impact of potential EU bilateral trade deals with the US, Canada and the Mercosur trading bloc. The IFA is extremely concerned that the EU trade Commissioner, Karel De Gucht, will sacrifice the agriculture sector in countries such as Ireland and France and use agriculture as a bargaining chip in both the Transatlantic Trade and Investment Partnership, TTIP, trade negotiations between the EU and the USA and bilateral negotiations between Canada and the EU.
In the EU bilateral trade talks with Canada, Commissioner De Gucht appears ready to inflict severe damage on the Irish and European livestock sector with a substantial increase in beef imports from Canada. During the summer the IFA travelled to Canada to meet the Canadian trade department and it is interested in cherry-picking the market and dumping beef at certain times. That cannot be allowed to happen. There is a real fear that large concessions to Canada and the US on beef imports would severely damage Ireland's agrifood sector and threaten thousands of jobs. As the largest beef exporter within the European market, a deal involving a substantial increase in beef imports from the US and Canada would inflict severe damage on the Irish livestock sector.
Maintaining our high standards in Europe is a major issue in the trade negotiations. I refer to standards on issues such as food safety, traceability, environmental protection and animal welfare. European producers and consumers will not accept food imports from production systems where the use of hormones in beef, BST growth promoters in milk and the beta-agonist drug, ractopamine, in cattle and pigs - all banned in Europe - is common practice.
Europe cannot agree to any imports which fail to meet EU standards on the critical issues of food safety, traceability, environmental protection and animal welfare. The IFA's stand is that there must be equivalence of standard, not mutual recognition. The two standards are too far apart and mutual recognition is unacceptable.
The IFA has called on the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, to intervene strongly at the highest level to prevent what is being flagged as a very bad deal for Irish and European livestock farmers. I have also raised this important issue on numerous occasions with the Taoiseach and the Tánaiste.
A recent IFA study of the importance of the cattle and sheep sectors to the Irish economy by Professor Alan Renwick from UCD shows that the €2.3 billion output at farm gate level creates a total output of €5.7 billion for the Irish economy. In addition, the Irish cattle and sheep sectors support over 100,000 farmers and over 50,000 jobs in every parish across Ireland.
In view of the high sensitivity of the EU market to beef imports, the EU must rule out any significant increase in imports in this sensitive product area. Any increase in imports into the European Union will be very damaging economically and environmentally and will have social consequences across rural communities in Ireland and western Europe that depend on livestock production for their livelihoods. The IFA is calling on this committee to do everything in its power to see that issues concerning our strong performing export-orientated agriculture sector are brought to the fore and rigorously defended.
A major reduction or elimination of import tariffs or a significant increase in a tariff free quota for beef or both, as demanded by the Mercosur group, would significantly cut the EU import price for beef. This, in turn, would severely damage beef prices on the EU market, particularly for an exporting country like Ireland.
Reports from the EU Food and Veterinary Office highlights the ongoing failure of Mercosur countries, including Brazil, to meet EU producer and consumer standards on the key issues of food safety, animal identification and traceability, animal health, environmental standards and disease control.
The value of Irish food exports has continued to grow in 2013 and will be close on €10 billion by year end. The message is clear: Irish agriculture is performing but it is in need of support if it is to maintain growth and drive exports, jobs and economic activity.
As Ireland's largest indigenous sector, the growth of the agrifood sector has a hugely positive impact on the Irish economy, both at local and national level. Together with the other key agriculture stakeholders, the Department of Foreign Affairs and Trade has a very important role to play in supporting the expansion of the Irish agrifood sector through the co-ordination of trade promotion in existing and new markets. In addition, Ireland must be strong in defending the interests of the sector against policies that would unfairly undermine its competitive position.
Our position has always been clear. The EU has put very large levels of regulation in place, whether it is food security, animal welfare or environmental standards, that have resulted in a significant cost to the farmer on the ground. These costs are not shared by industrial farmers in the United States, Canada, South America or New Zealand and, therefore, we say only products that meet those same standards can be allowed into this country.
I thank Mr. Bryan. At every opportunity in my own travels and the travels of the committee we promote the Irish food sector at every level. That is something we do as part of our trade promotion remit. I will take questions now from members. Mr. Bryan is familiar with our foreign affairs spokesperson for Fianna Fáil, Deputy Brendan Smith. As a former Minister for Agriculture, Fisheries and Food I am sure he has some comments to make on this issue.
I thank the Chairman and join him in welcoming the IFA president and his colleagues to the meeting. I compliment Mr. Bryan on his positive and wide-ranging contribution on the importance of the agrifood industry to our economy overall. In his concluding comments the IFA president remarked that Europe demands very high standards. We have those standards in this country and that is the reason we export food to almost 170 countries. That comes at a cost to the individual farmer in terms of the cost of production. Over the years farmers and the State have invested heavily in reaching those standards, whether in on-farm facilities, genetics, breeding, dietary requirements of our herd and so on. All of that research and development innovation by the food industry has paid off to the point where we are continuing to grow exports, which is very welcome. Something that has often been ignored over the years is that the smart economy has been working in the food industry and on our farms for many years. That is the reason we have achieved those very high standards.
I have some questions on the proposed bilateral deals, an issue we discussed here previously. Bilateral deals can be acceptable but we would be better off if we had a balanced and fair completion of the World Trade Organization, WTO, Doha Round. That is not easy to achieve, and it is an area that does not appear to come within the remit of the Department of Foreign Affairs, but appears to be still with the Minister, Deputy Bruton. It might be better if we had some direct work, along with colleagues in other parliaments in Europe, on those particular trade issues.
The IFA president made a strong statement on trade Commissioner Karel oe Gucht. That commissionership always seems to be held by somebody who poses particular difficulties for us. I recall dealing with Mr. Mandelson when he was trade Commissioner and it was never easy then either. Mr. Bryan's remarks, and the personalities involved do not come into it, were very strong and I am sure they are well-based.
Considerable fears arise in the comments he made regarding possible deals with the United States and Canada which would have major implications if, as has been flagged, they came into effect with regard to our beef industry in particular. That has to be a serious concern for us. Mr. Bryan's organisation works very well with sister organisations throughout Europe. Is the IFA working with sister organisations in like-minded countries that have concerns also? Is that happening at official and political level also with regard to protecting our particular interest when it comes to possible US or Canadian deals?
With regard to Mercosur, Mr. Bryan rightly stated it has not yet achieved the equivalent standards. There would be a slight division, so to speak, from my understanding of the food industry here regarding the potential for a Mercosur deal. The drinks industry and the dairy people would be much more favourably disposed rather than the livestock or the beef sector in particular. Mr. Bryan flagged for us the potential downside to the US or the Canadian deal and it is an issue we must keep on our agenda.
I thank Mr. Bryan for his very positive contribution. In his organisation's work with sister organisations in Europe he never loses the opportunity to promote vigorously our strong industry and assist the beef, dairy or whatever sectors to grow their export markets. That is to be welcomed.
Mr. John Bryan:
On the point made by Deputy Smith, when Food Harvest 2020 was introduced in 2009, the world population was 7 billion and people thought a figure of €12 billion was ambitious. We are almost at €10 billion now. It was an important report to set a roadmap for agriculture and it is welcome that the Department of Agriculture, Food and the Marine sees that sector as an area worth investing in because it is important when decisions are made around budget time. We will be asking the Government to support the agriculture sector to hit these targets and feed the 9 billion people in the world, which is very important.
When people in Europe talk about a trade deal, and Deputy Smith referred to this, they always mention the word "balanced" but what is balanced? It is like the average - a foot in the fire and a foot in the fridge. The difficulty is that what one person regards as balanced might not be balanced for another person. In terms of our difficulty, if someone sells an extra 10,000 Mercedes and they close down the Irish beef industry, that might be balanced in terms of billions of euro for Europe but not in terms of jobs for Ireland. In that regard I attended a Directorate General - Agriculture trade conference in Europe on Monday. We have to think about jobs also because the multiplier effect of €1 billion worth of spirits is nowhere near the multiplier effect of €1 billion worth of beef. Our trade balance with the US is in Europe's favour but 50% of it is spirits and if spirits were taken out of it, that changes the figures totally. At employment level, therefore, it might not be quite the same.
In response to Deputy Smith, from that point of view the French have similar views to us. Before attending this meeting, we received a delegation that included the president of the Norwegian farmers' association. They have similar views to us because they also are a small economy and believe that food security and food sovereignty are very important. We work a great deal in that sector.
In the context of the European Union, Karel De Gucht and Mandelson were mentioned and they are not as good at defending as they should be. The Canadians are talking about a trade deal with Europe and to respond to Deputy Smith's point, we are concerned about beef and pork. While we should have opportunities in the dairy sector, the Canadians have insisted that sector is not up for discussion. Consequently, what they do not wish to be a matter for discussion is not on the table. Although they seek concessions on beef and on pork, they will not talk about the dairy sector because that does not suit them. The European Union has proven to be a weak negotiator. For example, it made an offer to the Mercosur group that no one should have made. Luckily enough, the Argentinians threw it into the bin and changed all the rules as they went along and have broken every deal to which they have agreed for the past ten years. I refer to the capacity of the European Union negotiators to defend jobs in Europe. We are very concerned about beef and pork in the context of a Canadian deal and while we would have an interest in dairy exports, the Canadians are not willing to discuss that sector. They are saying "send us the product but we will not take any of your dairy".
The same point is true in respect of the United States. In this regard, we have concerns about beef, pork and dairy because the United States perceives Europe to be a place into which its producers could export substantial quantities of powder. However, our big issue in this regard is that they use hormones, beta-agonists and genetically modified organisms. Last July, we visited Canada and the the United States and I cite the example of a man who milks 10,000 cows in United States. He spends perhaps $500 in getting a Hymac to dig a hole into which to put the slurry from those 10,000 cattle. However, farmers in counties Clare or Cavan who wish to milk 30 cows will have been obliged to spend €50,000 on slurry storage. Is this a level playing pitch? Animal welfare rules also are different and all these factors must be taken into account. Moreover, why did they build all the big dairy farms down in Texas and New Mexico? The answer is cheap Mexican labour. Irish farmers compete against industrial farms in America or New Zealand where they have no animal welfare regulations and no environmental standards, not to mention the other matters such as the use of hormones and so on. Consequently, we must be very careful in these negotiations. At the same time, the European Parliament as a body has clear views - in so far as the views of 800 people can be clear - that it wants neither hormones nor genetically modified products but wants the highest of animal welfare standards. As both the Chairman and Deputy Smith observed, Irish farmers have invested substantially, to the tune of nearly €4 billion, in cattle houses, slurry storage and so on. That is a huge investment and it must be borne in mind that to comply with European standards costs a fortune. The efforts being put in by Bord Bia regarding quality assurance, sustainability and the recent conference are good. We must be able to tell the Germans that we have the highest environmental standards but there must be a premium for that. That really is the message
I have a couple of questions, if that is all right. Mr. Bryan started off by talking about the fodder crisis and last night, I watched Michelle O'Neill, the Minister in the North, as she thanked the Irish Government for waiving the cost in contrast to the British Government, which is levying a huge charge for the delivery of the fodder that was essential for the industry. I remember Ian Paisley talking years ago about how he is British but the cattle are Irish. How important is the all-Ireland nature of the industry? How important is it to sell the image of a clean and green Ireland internationally? How important is the lack of genetically modified crops in Ireland and how does that link in with our green image internationally? Another issue that concerns me is that, traditionally, enterprises such as Jacob's and other food manufacturers were based in my constituency but they have closed down completely and moved elsewhere. How important is that? I note many of those involved in the food industry were talking about the lack of supports, the costs of energy and rent and so on. How important is that? Moreover, if this manufacturing base shrinks even further, how difficult will that make it to maximise jobs and production in Ireland itself? This also relates to controls regarding the origin of the products. If they are produced in our own country in which those rules and regulations are in place, we would know exactly how Irish products are going to end up on the market.
Internationally, what global business and human rights standards do Irish farmers apply to their agricultural investments? I refer in particular to the developing world and whether they include standards to promote good environmental care and practice. Members are familiar with the use of bio-fuels in many parts of the Third World and how European companies and investors have been buying up good agricultural land for bio-fuels. Is that on the agenda of the Irish Farmers Association, IFA? On the issue of trade missions, have the Government trade missions helped Irish farmers to expand the level of exports or to find new markets? How has the Arab spring and the upheaval arising therefrom affected exports to the Middle East and North Africa? Have such exports have fallen? How profitable and important does the IFA believe a renewed beef deal with Iran would be for Irish beef exporters? I have asked a lot of questions and I would appreciate it if Mr. Bryan could answer some of them.
As the Deputy has asked a lot of questions, I will give Mr. Bryan a little time to answer them because I must suspend the meeting for a few minutes until the vote in the Dáil is over. Consequently, Mr. Bryan will have plenty of time to digest those questions.
I also welcome Mr. Bryan, Mr. Kinsella and Mr. Smith.
On the inspection of beef production in the Mercosur countries, the IFA exposed this in Brazil a number of years ago and there was much controversy about it. If we were exporting beef to the United States, there would be a strict regime in the factories in the production of beef for such export. I had experience of this when I was involved where there were regular strict inspections and a series of recommendations to keep one's market. Now that things have turned around, why is there not the same level of inspection, and standards set, by the EU?
I also want to ask about the area of food identification. In my constituency, we saw the collapse of the poultry sector, in both Cantoher and Castlemahon, which was partially due to imports from the Far East and the identification in the market of the product itself. As it was packed in the EU, it got an EU identification.
With regard to competition in the beef sector, the IFA informed us of the increased contribution of the sector, but what about the contribution to the producer? Does the delegation have a reflection on the general issue of competition internally, but also competition between the live market and the beef exports? That was a live issue in the past in regard to keeping the price of the finished beef product high. Would it make a comment on that?
It is outside our remit. The members of the delegation are involved in trade promotion but we will give the Deputy a little leeway on that. Perhaps Mr. Bryan would take those questions from Deputies Crowe and Neville.
Mr. John Bryan:
The first matter Deputy Crowe referred to was the fodder crisis. The rain in 2012 and the subsequent very late spring was unprecedented. It was almost what one would call the perfect storm. There was less fodder made, the stock went in much earlier, there was significant pressure and then it rained continuously. Farmers were hoping to get stock out by St. Patrick's Day. Instead, it rained all through April and then it was cold in May. Both badly affected it. From week to week, the fodder crisis got worse and it put pressure on farmers. Many farmers were very depressed over it. We were going to a meeting in Tuam last week and met a farmer in Athlone who said he was at a low ebb wondering how was he going to feed his stock. As the Deputy stated, the Government acted and with the IFA, FBD and other partners put together €1 million. While it might have sounded a small sum, it was to show solidarity and get fodder in. What came from England was helpful and, when it ran out there, a bit came from France. It was merely trying to show a bit of light at the end of the tunnel. People put effort into it. It showed community spirit. Probably what will never be documented is the amount of fodder moved. From several counties, such as Wicklow and Wexford, significant quantities of fodder travelled to the north west and the mid-west within the country. Farmers who never traded fodder who might always believe in being prudent and keeping surplus, did deliver it and there was a significant effort put in. It was good for farmers to help out one another but one can only stretch an elastic band so far.
Deputy Crowe referred to all-island relations. There is significant agri-trade and business and we would have close relations with our sister organisation, the Ulster Farmers' Union. We were in Virginia lately. They were down at the ploughing match. We work with them in Europe and we would have similar views on many areas.
There is a relatively stable all-island health status, certainly in the Origin Green where there is much dairy production. There are significant quantities of Northern Ireland milk processed by Town of Monaghan, Lakelands and, to a lesser extent, Glanbia. There will be an understanding in place if they do the same certification, but they will have to do the certification to get it. We have been a little more generous in offering Origin Green certification than they have been in offering the Red Tractor mark. It is not mutually reciprocal. We would like to get the same for our product going into the United Kingdom market but that has not happened. We have a close working relationship with them.
Deputy Crowe referred to the lack of GM. There are some markets, such as our colleagues from Norway who we met before we came in here, which will not take most products unless they are GM-free. The Austrians are a bit the same. In general, most markets will not pay a premium for it. Unless there is a premium, it creates a cost.
The Deputy referred to matters such as the closure of Jacob's. There would be a significant difference between a meat factory and a dairy processor, and Jacob's. The meat factor or dairy processor is processing 100% Irish product whereas 90% of what was going through Jacob's was imported. Jacob's had the cost of importing it and the cost of handling it. It is one of the points we make repeatedly about the Irish food sector. There are the indigenous companies where everything they buy is Irish and where a significant amount of the employment is Irish, and others where 1% of it is, where they shake a little pepper on it and call it Irish. We would have a concern about that because it does not create the same number of jobs.
One of the problems we encounter is that being an island, we are distant from the market. Fertiliser and feed, both of which are bulky, and fuel often cost more in Ireland than on mainland Europe. In addition, our exports have to travel and that is an extra cost we have which adds to it.
We have always highlighted standards. Deputy Neville referred to it.
There are animal rights and human rights. Our trip to Brazil highlighted the fact that there were not human rights, never mind animal rights. I was asked about bio-fuel. We presented to the agriculture committee a video on our trip to Brazil. Some of the findings were shocking. Many of the big ranches in the country have slave labour. People must travel 20 or 30 miles down a dusty track to get to them and they wear rags and live in huts. On one of the farms that we visited, approximately 17 children came out of a hut. The standard of living is poor. For international companies to be buying food from South American and putting it on the supermarket shelf here is questionable. Animal welfare does not exist, and I will not mention the issue of hormones.
This ties in with the question on bio-fuels. We were on a plantation and collected information from all sorts of people. We were advised to meet an Irish priest in a nearby church after Sunday mass. The priest described how badly the people are treated on the plantation. He said he should not be quoted as he would have to leave the morning after. He said the children are loaded into trucks and brought to the plantation, but they never come back again. It is pure slave labour.
The bio-fuel energy story in South America is a story that will be told someday. It is not a good story, however. The life expectancy of the children on the plantations is low. If one ever wants to do some research, one should head to South America. When one compares the circumstances in South America to those in Ireland, one notes a great difference. The Spanish moved to South America 400 or 500 years ago after the arrival of Columbus. They settled on all the good land in the south and used it for cattle production. The land is all now used for bio-fuels and all the cattle ranches have moved up to the rainforest. Farmers burn an area the size of Munster every year to create farmland, yet we worry about climate change in Ireland and emissions from a few cattle. However, we are quite happy to take produce from South America. It does not add up to bring beef in the from South America given the human rights, animal welfare and climate change considerations. This story has to be told. We are good at telling it when we are asked.
The last question I was asked was on exports and trade missions. We have been in Spain with Bord Bia and the Irish embassy attaché. We are brought to meet customers who would not meet us without an embassy attaché. We were in Washington lately. Mr. John Dardis is the embassy attaché there. The staff are very good. The public service recruitment embargo should not be applied as the reality is that a few more attachés in Irish embassies and a few more people in Bord Bia offices in America would be beneficial. To have one person in America is ridiculous. I have raised this with the Taoiseach as I believe trade missions are useful.
It is a question of competition. It is very easy for a small group of colleagues who get on very well together to manipulate the market. However, competition prevents this problem. Iran and the Middle East are useful. China is useful but small quantities are involved. With regard to live exports, we always say that the calf, the weanling and the forward store cattle must be borne in mind. In the past, when we sent forward stores to North Africa, it kept more Friesian cattle in the country. The trade creates employment. It is not a matter of a loss of jobs. Having live exports can certainly increase the numbers here.
Deputy Neville referred to Mercosur. The United States opens a trade and then creates 40 barriers. One must be USDA approved and meet the standards. Then one must be cleared with the state. This is why jumping into a trade deal with the United States is problematic. It is a case of the barriers that it will put in place. Even at present it is talking about putting new licensing arrangements in place. Applying for a licence will incur costs. We would have said exactly what Deputy Neville said. We met the food and veterinary officers in Grange. They should have the same regime as the United States. They should be certifying the plants and there should be individual inspections. The European Union tends to recognise certification in the country of origin. Standards are not the same everywhere. There was no even level at all. It is scandalous that chicken that is certainly not Irish comes from Thailand and gets tossed into a plastic bag only to be labelled as of Irish origin. This is scandalous. We have made representations on this to the European Parliament and the agriculture committee. Serious tightening up is required in this area. We have been seeking retail legislation for as long as I am around and it was promised on several occasion. Retail legislation would force the identification of the country of birth, the country of rearing and the country of slaughter. If a product has 20 parts from 20 different countries, the producer should be forced to label it accordingly. That is what is required, rather than what is occurring at present, which is misleading the consumer.
I represent the Dublin Central constituency, an urban area but I visit the country a lot. When I do my shopping, it can be difficult to find Irish produce, particularly fish.
A concern among many African parliamentarians is that the land that they need for food is being taken up for bio-fuel production. In the past we were lax when it came to animal welfare, particularly in the export of live cattle and the slaughtering of pigs. Improvements have been made but there is still work to be done in this area.
The delegation will have to excuse me as I am an urban Deputy. We eat food but we often do not know from where it comes. I congratulate Irish food producers for bringing food quality to a sophisticated and high-value level. This is displayed in the marketing by the supermarkets from Aldi and Tesco, emphasising the quality of Irish food. There is a large range of artisan foods available too. Although I married a yank and the word “blueberry” is synonymous with America, never did I believe I would see blueberries produced in the Bog of Allen which are a superior quality to the ones imported from Israel. We have quality agricultural land, food producers and processors.
I recently met the agricultural Minister from Ethiopia, an agricultural country with a population of 94 million. Our exports to it amount to €1.7 million. Africa is no longer about the black babies or feeding the hungry. African countries are sophisticated and their economic growth is phenomenal. It has an emerging middle class just like in China. I played my role as a city councillor in developing relations with China and seeing Dublin twinned with Beijing. I am very familiar with China, Africa, having lived there for four years, and the economic growth of the middle classes there. As a member of the committee, I am interested in assisting in the development of further export markets to formerly Third World countries. Is it Bord Bia we rely on to develop these markets? I know embassy staff play a role in developing trade. I thank the IFA and farmers for improving the quality of Irish food produce. How can this committee work with the IFA in developing these markets?
The delegation attended the trade mission to China last month. How important are trade missions in promoting the Irish food sector? Given the fact that new markets could be opening in Iran and Japan, will demand for our food produce, particularly beef and lamb, exceed production? The delegation referred to the role played by our embassies in developing trade. They tend to be smaller compared to those of other countries and have limited resources. While they work with Enterprise Ireland, IDA Ireland and Bord Bia, do they make a significant impact on trade abroad?
Mr John Bryan:
We are always concerned about the availability of Irish produce. It is important that Irish produce is labelled as Irish. The bio-fuel debate is getting stronger in Europe. The political decision by Germany to close down its nuclear plants while producing more non-fossil fuel has created a problem. Most European states have set a cap of 6% of their land area being set aside for bio-fuel production. The percentage in Ireland is quite low. There was some miscanthus grown for a while but it depended on a subsidy. The most significant alternative generation sector will be wind. While there are a large number of objections to wind farm development, it is hard to see whatever alternative there is, particularly when people are also opposed to fracking, nuclear and fossil fuels. Some compromise will have to be achieved.
It is accepted that Ireland’s welfare standards in live exports are the highest in the world, so much so that some international shippers try to get Irish certification because it is accepted by the US Department of Agriculture, USDA.
The USDA accepts very little from anywhere else. Its standards are high but our standards are higher - Deputy Smith would know this better than anyone else. The Department of Agriculture, Food and the Marine has set the highest standards in the world for storm levels and stabilisers. Dr. Bernadette Earley at Grange carried out some excellent research to show there were no stresses in respect of live exports from Ireland. The investigations included measurement of cortisol levels and everything else. I always say that everything one does in politics is like a game of pool - when one hits one ball, it has 40 effects. When they stopped our cattle going to north Africa, a journey that took six days, they replaced them with cattle from South America that were subject to none of the rules we had and a journey that took four weeks. They banned a trade that was well regulated and that had the highest animal welfare in the world and replaced it with a trade coming from across the globe. One should always look at cause and effect and one must bear in mind that Muslims insist on a certain amount of their cattle being slaughtered in their own manner by people with blessed hands. The trade must be provided from somewhere so the greatest benefit for everyone would be to have it properly regulated with the top boats and the best regulation.
Deputy Byrne asked a simple question. The reality is that the Department deals with trade as well as foreign affairs. Trade is very important to agriculture. We are a small exporting nation. What we are saying here is that the same standards apply within Europe. The Dutch are natural traders, as are those in the UK, and they do not consider agriculture to be important to the same extent that we do. They would be quite happy to sacrifice agriculture to sell more cars, so it is important that a country such as Ireland says that we want fair play. That is why we are here today. People probably underestimate the quality of our land. We are a small country but we have 4.6 million hectares of good agricultural land. We have a massive amount of skill, which we sometimes underestimate. The Deputy referred to the Chinese visit. McDonald's senior management from the US are shocked at the knowledge Irish farmers have regarding genomics and grass types. We take it for granted, but this knowledge of stockmanship should never be underestimated. Our largest assets are land and water. The Deputy referred to infrastructure. Over the years there has been good investment, be it in dairy processing or meat plants. We meet our colleagues from the UK. They want to expand at their end. They have no steel. We are building a giant plant in south Kilkenny that can process nearly 50% more milk than Glanbia does. We have the capacity, so we should never underestimate the value of the infrastructure and the knowledge we have.
The Deputy referred to Ethiopia. The Irish embassies in Africa were very concerned for a long time about distributing aid and helping those countries develop, for example, through giant projects in education. As the game moves on, one must look at using the embassies in those areas, which is why we say there should be more trade attachés in more embassies. The population in Nigeria will grow significantly and there will be a middle class there. I spoke at a function with the last British ambassador to Ireland, who had been in China before he came here, and he said the Chinese middle class was very discerning. It wants high quality standards and does not trust its own. It does not accept something just because it is certified as safe by the Chinese authorities. It wants Irish, American and European standards. Thus, there is a huge opportunity in China.
A few people asked about the value of embassies and trade. Most of those people will not talk to one unless one has an ambassador. There is a need for initial contacts. A delegation from China visited here during the summer and met the Minister for the Environment, Community and Local Government. That is the level they will meet. They will not meet Glanbia or Teagasc. Even if there was a contract to be signed with Keenan's, they wanted a Minister signing. This shows the necessity of an ambassador to make initial contacts. On a trip to China, I saw how important protocol is in that country. One needs a Minister and an ambassador. One can never underestimate the opportunity offered by the use of an embassy and ministerial trips. They might often look big and cumbersome but they open up contacts. Since that trip to China, a couple of Chinese minsters have come to Ireland and trade has grown.
I have answered most of the Chairman's questions. The last one he asked related to demand. I am convinced that as the world population grows, water will become an issue. We visited Australia and New Zealand about three years ago. The Australians are so concerned about depleting their water resources that they have asked farmers to cut the amount of water they use for irrigation by 30%, which will drastically reduce their output. The only thing a farmer in Texas or New Mexico wants to talk to one about is water. Farmers talk to each other and the first question a farmer will ask another relates to water. It is not a question we know the answer to in Ireland because we know we have enough. If one does not have enough, one knows. From that perspective, we have a great opportunity in the growing world middle class. We see significant value in the embassies and in getting in there on time, because this population is growing. We need to tell the story of Ireland. Anywhere I have been with an attaché, be it the US, Spain or China, it has worked. I told the Tánaiste that this was vital work for the Department.
Mr. Pat Smith:
I visited Kenya this year. I went into a supermarket in the middle of nowhere and saw Kerrygold butter on the shelves, which I thought was phenomenal. It is fair to say that some of our companies are very active in Africa. Glanbia has been involved in Nigeria for a number of years and is investing and employing people there. There are significant opportunities in that regard. The association also promotes self-help and has been involved in self-help in Africa for 30 years. We understand the dynamic down there and promoting co-operatives for small farmers must be a way forward.
In respect of Deputy O'Sullivan's point, we are heavily involved in aquaculture. There is an aquaculture section within the association. In respect of bio-fuels, there is a view that they replace land in isolation. A total of 80% of bio-fuels - particularly when crops are used for bio-fuels, because this is the main area of concern - goes back into producing animal feed, so it is not a problem in itself.
In respect of Deputy Crowe's point about genetic modification, we have no problem with having no GM. However, it is an issue for Europe and for farmers if countries in the rest of the world can use GM technology, reduce their use of fossil fuels as a consequence, reduce their use of pesticides and insecticides and improve production. In the Americas, production is increasing by between 2% and 3% per year due to the use of this technology, yet we are deprived of the chance to use it. As the president said, we must compete with people who use it. In a few years' time, European farmers could be 30% or 40% less competitive than other farmers if science does not dominate. We must try to get science back on the agenda in the context of the technologies used.
Our costs are higher than those in Northern Ireland. We have an opportunity. The British Isles, particularly Great Britain, is our greatest trading partner when it comes to agriculture. It has been estimated that the population of the UK will grow to 70 million in the next few years. Its production is dropping and it has a ready supply of high-quality food on its doorstep. If we can get closer on the quality schemes and there is an acceptance in the UK of our standards and an acceptance here of UK standards, it will be a win-win situation for Irish agribusiness.
My question relates to the fact that Great Britain is our largest trading partner and our neighbour.
In the IFA's discussions with its sister organisations in Britain, has it encountered any nervousness in regard to a possible referendum on British membership of the European Union? We can lay the best of plans for trade and exports but we depend on exchange rate stability. Sterling depreciated by 24% between October and December 2008. It was an unreal time. If Britain had a different relationship with the European Union and the Single Market, it would impact heavily on us. What is the general view of the farming organisations in Britain about membership of the EU and the political ratcheting up of anti-EU sentiment?
Mr. John Bryan:
We have a close relationship with them. They are our nearest neighbours and it is a huge help that we speak the same language. Scotland will hold a referendum on whether it wishes to leave the UK. The Scottish tell us they will play hardball but they are not going anywhere. The Scottish are fairly pragmatic and they will vote based on where the pound and euro stands. They are using the referendum to negotiate a better deal on single farm payments and to keep a higher proportion of oil revenues. They have no doubt that they will vote to remain in the UK. People are telling us that they will vote to leave, but when they get closer to the point where they have to make the hard decision, it is more than likely they will want to stay.
I view England as having two economies. The greater London region, which is connected to banking and commerce, wants to remain part of the EU because it cannot afford to leave. The rest of England may be different. In Scotland, the agriculture sector need to stay in because people know whatever support they may get from the EU, they will get none from their own Government. The feeling in the greater London region is that people will vote to stay in but only when the gun is put to their heads. They may continue to speak about leaping but they will not do so at the end of the day. Peter Kendall, the president of the National Farmers Union, is a wealthy grain farmer from east Anglia. Although he is very conservative, he reckons they will stay in when push comes to shove.
Is the IFA in favour of lifting the ban on GM foods? In regard to bio-fuels, Mr. Bryan noted that much of the by-product is used in agriculture. That is not necessarily the case in respect of palm oil. I have seen tracts of land on which nothing is grown for mile after mile. I ask the witnesses' view on the EU's set-aside policy. Do they agree with the policy of setting aside good agricultural lands for bio-fuels?
Mr. Pat Smith:
In regard to Deputy Smith's questions, a lot has to play out in Europe, as well as the UK, over the next couple of years. The situation is volatile and I agree with the Deputy that it is worrying. None of us can predict exactly how these matters will turn out, but I agree with Mr. Bryan that something needs to happen in Europe. I am sure the Irish Government will be working hard to ensure the UK integrates further with the European Union. I recently read an article that suggested the sterling will eventually merge with the euro. I do not know about that but it is the medium term about which we should be concerned.
In regard to our position on GM foods, there is a misunderstanding. Farmers are definitely concerned about GM but is it technically possible to declare ourselves a non-GM country given the amount of feed produced in countries that permit GM crops? I would declare it in the morning if I thought we could get an extra red cent for the products we sell to retailers or on international markets. We can jump all the hurdles we like but we must be careful until we see a value and a benefit in it. In Europe, Austrian and Italian farmers are very opposed to the use of GM but ultimately science rather than politics has to prevail. European farmers are being deprived of technology that could be beneficial to the environment, reduce fossil fuel use and improve the way in which food is produced. Deputy Byrne referred to Africa. If we can use biotechnology to grow wheat on drought ridden soils, there would be great potential to reduce poverty around the world. This is a complex issue but it comes back to the question of whether GM and the science behind it are safe. The IFA holds to a neutral position at present but we are putting down a marker that farmers, whether in Ireland or in the rest of Europe, cannot be expected to be competitive with the rest of the world if our hands are tied behind our backs. What is good for the goose must be good for the gander.
I suspect Mr. Smith would warmly welcome the research that has recently been sanctioned in this area. One school of thought argues that Teagasc scientists should not study GM but they have been sanctioned to carry out such research.
Mr. Pat Smith:
I concur with Deputy Byrne's comments. Last year, a farmer growing a crop of potatoes would have to spray with fungicide ten times to prevent blight. That means going through the field in a tractor ten times, with all the fossil fuel that accompanies such activity. Surely it is beholden on us to explore the potential of a technology which has been proven safe and can avoid those ten passes through a crop of potatoes.
It goes against the image of green Ireland to introduce these products. We know the history of Monsanto and other companies in Third World countries. That is where the difficulty arises. On the one hand we are selling Ireland as green but on the other we are introducing these products which most consumers would not regard as green. Farmers will lose a considerable part of their market if they go down that road.
Mr. Pat Smith:
That is a debate in itself. The IFA does not have a position on GM. We do not grow any GM crops at present but a wider debate is needed on whether we should permit ourselves to become 30% to 50% less competitive than the rest of the world. A strong environmental argument can be made for considering the technology. In light of the negative connotations, perhaps we should stop describing the technology as GM and consider it instead in the more general context of biotechnology.
In regard to the question on set-aside, we do not have much set-aside in Europe anymore. We should be proud of our biodiversity in Ireland. Farmers have made a big commitment to ensure a productive agriculture sector while at the same time protecting biodiversity. I have found when travelling around the country that farmers have a big interest in this.
I thank the representatives from the IFA for their contributions.
I particularly thank Mr. Kevin Kinsella, Mr. John Bryan and Mr. Pat Smith of the IFA for their presentation. We had a very interesting discussion and may have gone outside our remit in discussing trade promotion. It is always good to discuss these issues with our urban members.
The food industry, food promotion and food exports are extremely important. As members will know from travelling abroad, our reputation abroad is at an all time high. I can assure the executive of the IFA that we will continue to support the expansion of the food sector in our travels, particularly in terms of trade promotion. Members of the committee will travel to Ghana in Africa in the next few weeks and we will examine trade promotion in that area. The agricultural sector that will come up for discussion given that it came up for discussion today when we met the Minister for Agriculture from Ethiopia where agriculture accounts for 46% of trade there. The products grown there such as coffee might be different from ours but trade works both ways. Our relationship with African countries, particularly the programme countries, is at an all time high. With Africa being a continent in which there is tremendous growth, with growth rates as high 10% during the past number of years, there are huge opportunities for exporting Irish food products there, as well as to countries in the Middle East. There are great opportunities for trade with the ASEAN countries, which we did not discuss today, those of Indonesia, Singapore, Malaysia and Vietnam. That is the reason I asked the question about trade promotion in those countries and the value of trade missions there.
I thank the delegates for appearing before the committee. We are almost at the end of the task of preparing our report. The IFA's input will be very much part of that report because the food sector is very important to us. I thank the delegates for engaging with us and for the very interesting and wide-ranging discussion between the members and the delegates.
I propose we will now go into private session.