Mr. Edmond Phelan:

As beef chairman I do not think I can ever recall a time when there was so much pessimism regarding the beef sector. Farmers are sick of the uncertainty, particularly relating to feeding cattle over the winter. While it is all very well to suggest one should feed steers and not bulls, the former are a lot less efficient than bulls at converting feed into carcass weight. It takes a good performance to put on a half kilogram of carcass weight per day on a steer. If the value of that kilogram is only €4 and the cost of feeding that animal is €3.50 per day, it is obvious that winter finishers of steers cannot survive without a price rise over the winter period. That price rise must be in the order of 3 cent per kilogram per week but instead, there have been price drops in 2014.

The bigger picture is that beef producers cannot be expected to absorb continually unanticipated losses. Meat processors and retailers have a lot of soul searching to do. Retailers seem to think they have a right to beef produced at below the cost of production and processors are happy to collude with this. In addition, the processing industry must be held accountable on a number of issues. We still have had no proper explanation as to how the horsemeat scandal happened and nor do we have any sign of political will to punish the guilty. Farmers are sick of the extent to which they are punished for the slightest error. They see the heavy hand of the special investigations unit, SIU, being used to deal with the most minor of cases on-farm but they appear totally ineffectual when it comes to deliberate misconduct on an international scale, as was seen with the horsemeat scandal. Now it seems that farmers are paying the price for this, as factories blame the horsemeat saga for the greater focus on the bull beef specification.

Farmers have been misled on bull beef by processors. Less than two years ago, farmers were actively encouraged to buy Holstein bull calves from dairy farmers and were told money could be made by feeding them as bulls. The consequence was a collapse of the veal export trade and now, when these bulls come on market, we are told we have too many bulls and there is no market for them. It also is time to look at anti-competitive practices in the beef trade. In North America, processors are barred from controlling feed lots. Here, we have an increased numbers of feed lots under the control of beef processors, which are being used to keep a downward pressure on price. Worse still is the fact that the rendering industry is influenced by a single dominant player in processing and is uncompetitive. It is clear that all of these things are affecting the beef price paid to farmers and the reality is that price and specification appear to move in remarkable unison. The ICSA believes that it is now time for the Government to consider appointing a regulator for the meat processing sector. We have Government regulators for all kinds of private business sectors ranging from banking to telecommunications to broadcasting. Regulators reflect the fact that while private enterprise is to be encouraged, it cannot be allowed to operate unfettered and without scrutiny. Such a regulator must have power of investigation and real teeth. Moreover, it must ensure there is fair competition in the processing sector and that farmers have real choice when it comes to selling their livestock. The rendering sector needs to separate from processing. It is amazing that while Ryanair has been prevented from taking over Aer Lingus, we appear to have no concerns about what is happening in the rendering sector.

The Government must also revisit previous efforts to impose voluntary codes of practice on retailers. Voluntary codes simply do not work and we need to get real. It is not satisfactory that retailing is being dominated by a few multinationals but we still have no handle on the breakdown of margins when it comes to farm products such as meat, dairy or vegetables. I wish to emphasise that farmers are sick of what is going on. Farmers have bent over backwards to comply with cross-compliance. They went further and signed up in great numbers to Bord Bia's quality assurance because they were told it was essential in delivering top-priced markets for Irish meat products. At this point, there is complete frustration with beef quality assurance. It has been manipulated to the extent that some categories of stock are now subject to huge discounts and in some cases are unsaleable without the certificate, yet quality assured bull beef producers derive no benefit whatsoever therefrom. While I do not advocate this, many farmers are openly discussing a refusal to participate further in the beef quality assurance scheme and I cannot blame them. The industry is in trouble and many finishers and suckler farmers are intent on quitting and perhaps rearing dairy replacements on contract. However, a complete review of what is being achieved by the beef quality assurance scheme is required. If farmers cannot be assured of some stability, even at a time when the export markets are reasonably secure, what is the point of the scheme at all? The final straw for some farmers is the fact that the Minister met the processing sector recently but it appears to have been a complete waste of time. Astonishingly, the Minister did not even issue a press release on the outcome of the meeting. What does this tell one?

I will conclude by urging the joint committee to do everything in its power to make the beef crisis a key concern of the Minister and the Government and to push for greater regulation of the processing and retailing sectors, as well as greater focus on the anti-competitive elements to which we have referred.