Mr. John Comer:

I thank the Chairman and the joint committee for the opportunity to put our views as to where we perceive the genesis of this crisis to be and on some potential solutions in the future. This is a real problem on which we have forwarded a comprehensive document to the joint committee. I would prefer to submit that to the evidential database rather than to read it out. Instead, if it is all right with the joint committee, I will make a few points in my own words. A real problem has arisen that highlights the absolute sweeping volatility that can take place in the beef sector overnight. I have to hand prices that I could use to demonstrate this point but will avoid repetition of the facts and figures regarding the percentages of price falls and so on that already have given by my colleagues in other farm organisations. In reality, most of this volatility has been concentrated in the past three to four months and we must ask ourselves questions as producers of beef, albeit perhaps a different kind of beef in the future. At present, the dairy stock here stands at 1.1 million, which is projected to grow and, consequently, much of the beef will be coming from the dairy farmers. I suggest that over the next five to six years, probably well over half the beef will come from the dairy industry.

The question is whether that is what the consumers of Europe and the wider world want. A strategic comprehensive plan is required that will take the scope of the longevity of the production of beef. At a minimum, from conception to plate, it takes three years if one takes into account the nine-month gestation period and so on. We cannot end up in a position in which our industry and all the players involved therein tell producers what the marketplace will require but when they get there as producers three years later, there is no margin in it. The critical phrase in this regard is "net margin". A situation has developed in Ireland over the past six months in which prices fell from an historic high down to a negative price at which the primary producers are not making a margin. To provide members with an illustration of how pronounced is the problem, I had a telephone conversation with a guy who had a live Limousin bull under 16 months old that was killed out at 580 kg. The bull was graded as U2 yet his price was cut in the factories by 90 cent per kilogram, which amounted a cut of €457.20. That meant the farmer's margin was gone and yet, he had been advised to breed that type of animal. He had been told the consumers of Europe and the world would want that.

How can one allow such a situation to develop in an industry that is so important to the nation? There surely must be a better way, that is, a better collaborative approach by all the stakeholders to put in place a structure that at least at a minimum can deliver some sort of margin to the primary producer. While one could argue this was a reflection of the marketplace, the reality, as illustrated by the other farm organisations, is that in France, Italy and Spain, prices are holding their own. Moreover, according to the Bord Bia figures that have been produced for the United Kingdom, steer and heifer prices have increased slightly year on year. There is a deep suspicion abroad regarding the role of the meat plants. There definitely is a perception that some sort of market manipulation is being orchestrated by other players in the industry's chain in order to take a higher margin for themselves.

Farmers are saying to me that if it waddles like a duck and quacks like a duck then it must be a duck. Some structure must be put on this. The Minister for Agriculture, Food and the Marine must take some responsibility in this regard. His aspirations for Food Harvest 2020 are noble, but rhetoric will not be of any use. I am not here to specifically target any political organisation but a good deal of work has been done and it will be completely undermined unless the support structures that are put in place are backed up and we find out the reasons this has happened.

As an industry, we need strong competition in terms of live exports. Irish cattle that are exported to Spain, Italy and other countries are not discounted when slaughtered in those countries, yet we have a situation in which cattle posted on 1 April of this year that are exported to another jurisdiction on the same landmass will be classified as out-of-spec cattle. How can we in the Republic of Ireland compete in a market in which that change has developed overnight?

In the dairy industry, if somebody changes a specification and it is not the panacea or all that is good and holy in the farming community, at least there is a long lead-in to any changes. We cannot allow a situation to develop in which the specification changes overnight and the primary producer has no chance of being able to react to what is now perceived by the consumer to be a new requirement in respect of food production. The Minister, all political entities and people who have been elected to represent the citizens of Europe need to say that we operate in a Single Market and that a situation in which there is a different specification for one type of animal in one jurisdiction and another type of animal in another jurisdiction, to the detriment of the primary producer, cannot be tolerated.

In terms of how we can improve matters, the message I would like to get across here today is that we must bring all the stakeholders in and put in place a strategic plan that is sufficiently robust to be able to analyse, strategise and take away the powers of the middlemen and perhaps the powers of the multiples to dictate an environment that might not necessarily be realistic. Why is it the case that in another jurisdiction an under-36-month animal is fine for certain consumers in Europe while in our jurisdiction an animal that is over 30 months is deemed to be out of spec? I am not sure that the system we have augurs well for the future of beef production in this country. The consumer and the primary producer are being manipulated and we need to find a strategy that will reduce that to the minimum. What I have said is structured in this document, but I have put my own words on it.