Oireachtas Joint and Select Committees
Tuesday, 6 October 2015
Joint Oireachtas Committee on Agriculture, Food and the Marine
Sheep Sector: Irish Farmers Association
I remind members, delegates and those in the Visitors Gallery to turn off their mobile phones as they interfere with the broadcasting of proceedings.
During the first part of the meeting which will be in two parts we will discuss issues relating to the sheep sector. During the second we will discuss issues relating to the dairy sector. I welcome from the Irish Farmers Association Mr. Eddie Downey, president, and his colleagues, Mr. John Lynskey, chairman, national sheep committee; Mr. Peter Shields, vice chairman, national sheep committee; Mr. Kevin Kinsella, director of livestock, and Mr. Pat Smith, general secretary. I thank them for appearing before the joint committee to discuss issues relating to the sheep sector.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded 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 Mr. Downey to make his opening statement which I understand will be followed by some remarks by Mr. Lynskey.
Mr. Eddie Downey:
I thank the joint committee for giving us the opportunity to address it. As stated by the Chairman, I am accompanied by Mr. John Lynskey, chairman, national sheep committee; Mr. Peter Shields, vice chaiman, national sheep committee, Mr. Pat Smith, general secretary; and Mr. Kevin Kinsella, director of livestock. We wish to outline the case for increased support for the sheep sector and the specific proposals the Irish Farmers Association has put to the Minister, Deputy Simon Coveney, and the Department of Agriculture, Food and the Marine on behalf of sheep farmers.
The sheep sector is the third largest farming sector in Ireland, with over 34,000 producers and an output value of €300 million per annum. The sector is very important in terms of the number of farmers involved, strong export earnings of over €220 million and the very positive social and environmental contributions it makes in rural areas, particularly in remote areas and on hills where it is not possible to conduct any other type of farming enterprise. Sheep farming is particularly important in counties Donegal, Galway, Mayo, Kerry and Wicklow and is also strong in counties Roscommon, Cork, Wexford, Meath, Tipperary, Sligo and Carlow. I was informed earlier by the vice chairman that it was particularly important in County Lout also.
Mr. Eddie Downey:
I am sure that given the interest of members in their own counties, they will support the proposals we will be making today.
A study conducted in 2013 by Professor Alan Renwick from UCD showed that, due to the multipliler effect, for each €1 of output produced on sheep farms, an additional €1.33 of output was generated in the economy and that each €1 of support for the sheep sector underpinned a figure of €2.70 of aggregate output in the economy.
Total sheepmeat production amounts to 58,000 tonnes per annum, and Ireland is the third largest exporter in the EU with exports of 46,000 tonnes. Our main markets are France, the UK, Belgium, Germany and Scandinavia.
There are eight key meat plants involved in processing lambs for export and a larger number of small abattoirs servicing the domestic butcher trade. Lamb consumption on the domestic market accounts for about 15,700 tonnes with retail sales valued at €102 million.
Incomes on sheep farms are challenging and direct payments are hugely important in helping to maintain viability. The Teagasc 2014 National Farm Survey shows an average sheep income of €14,551 or only about 44% of the average annual earnings.
The sheep sector has not fared well in previous CAP reforms. In the original MacSharry reforms, the ewe premium system strongly supported incomes and drove numbers, which increased from below 2 million ewes in the late 1980s to almost 5 million in the 1990s.
Under the Fischler reforms with the move to decoupling, ewe numbers declined rapidly again dropping back to 2.2 million. The IFA worked hard to get support for the sector and various initiatives were undertaken to stabilise numbers, including the Malone report and the introduction of €18 million under the sheep grassland payment, financed from unused CAP funds.
The sheep grassland payment scheme was cut in the 2012 budget down to €14 million for 2013 and €3 million was transferred to the sheep technology programme, or STAP scheme. Payments at farm level reduced from about €8.50 per ewe back to €6.35 per ewe on a maximum of 210 ewes.
In the most recent CAP reform there were no specific policy elements agreed for the sheep sector either under pillar 1 or pillar 2, unlike the beef sector where the suckler beef genomics scheme from the pillar 2 RDP was introduced. This is worth €52 million per annum to the beef sector.
As part of the current CAP reform, the IFA lobbied strongly for a coupled payment for sheep, which was rejected by the Minister, Deputy Coveney, and his Department. Instead, the Minister incorporated the sheep grassland payment into the single farm payment of sheep farmers and increased its value to €15 million through unused funds and modulation. However, we now have a situation where we do not have a targeted sheep-specific payment that will support and develop the sector.
I would now like to hand over to our national sheep chairman, John Lynskey, to go through the finer detail of these proposals.
Mr. John Lynskey:
Chairman, Deputies and Senators, in order to maintain and grow the national sheep flock there is a need for increased targeted direct support for sheep production from a combination of EU and national funds. Support should be targeted at active producers.
A number of EU countries have introduced coupled payments for sheep as part of their CAP 2015-2020 plans. As reported in last week’s Irish Farmers' Journal, 22 member states have introduced varying levels of coupling for sheep. The average payment is €12 per head. A total of €486 million, or 12% of coupled payments, is being allocated to sheep. In France, payments are varying from €16 to €27 per head. In Spain, the range is from €8 to €13 per head.
Through a combination of CAP and national funds, there is a budget of €580 million per annum in the rural development programme for 2015-2020. The IFA worked hard to secure matching funds for the rural development programme. New schemes are being rolled out through GLAS, knowledge transfer, beef genomics and TAMS II.
Sheep farmers are entitled to their fair share of, and access to, these funds and schemes. The IFA is insisting that sheep farmers get the best deal possible. To maintain the national ewe flock, the sheep sector requires targeted sheep-specific payments to the equivalent to €20 per ewe. The IFA is demanding that the Minister, Deputy Coveney, starts providing funding for this, with priority access to a number of schemes and the allocation of €25 million for a direct payment.
Sheep farmers must have priority access to the GLAS payment of up to €5,000 per annum. All qualifying sheep farmers should be accepted into the scheme.
In addition, mixed grazing involving cattle and sheep should qualify as a payment measure. The latest move to limit the scheme and exclude farmers from the second phase is not acceptable. The changes to the low-input permanent pasture and traditional hay meadows measures effectively halve the value of those measures, which are vital for sheep and cattle farmers. This must be addressed and 50,000 applicants must be allowed join.
For commonage farmers, plans must be implemented in a flexible way in order to maximise participation in line with the IFA commonage strategy. The restrictions on GLAS+ must be eased so that hill sheep farmers and commonage farmers can qualify for the extra payment of €2,000.
The current sheep technology advisory programme, STAP, has been very successful, with more than 4,000 sheep farmers participating. This success must be built upon and the IFA is proposing that a target of 10,000 participants be included in the new knowledge transfer scheme for sheep in 2016. That scheme must be simple and practical in nature. Mixed cattle and sheep farms must continue to qualify for a level of separate payment. Likewise, mixed tillage and sheep farms should also qualify for additional payments. The IFA has made its views very clear to the Minister on the unacceptable situation in respect of the making payments to advisers and facilitators as opposed to directly to farmers and also on the actual level of these payments.
TAMS II must have a significant and dedicated level of funding for investment in the sheep sector. The decision of the Minister to exclude sheep fencing and technology equipment in the recent TAMS II announcement was wrong and must be reversed immediately. The Minister must include these items under the amendment currently being prepared on the Rural Development programme to be submitted to Brussels.
Payments for areas of natural constraint, formerly the disadvantaged areas scheme, should be restored to their pre-2008 levels. This would involve a restoration of payment rates at farm level and restoration of the payment status of farmers in split holdings.
The Government, in conjunction with Bord Bia, must adopt a strong market access policy to open up new high-value markets such the US, China and others, and remove the access restrictions and difficulties associated with TSEs for both sheepmeat and live animals. We also need to develop market outlets for light lamb. Other policy areas that are important for sheep producers include the need for Teagasc to maintain a strong independent sheep research and advisory programme, with Athenry as a centre of excellence. In addition, Teagasc needs to increase the numbers of sheep farms in the BETTER farm programme.
Bord Bia promotional funding for Irish lamb on the domestic and export markets must be maintained in addition to EU funding for generic promotion of lamb. There needs to be a worthwhile and transparent price incentive for lambs from a Bord Bia quality assured farm.
Sheep Ireland is working hard on sheep breeding. It is very important we have a well-funded, focused and practical sheep-breeding improvement programme implemented for the benefit of sheep farmers and the sector. It is essential that this be closely linked to the knowledge transfer programme and Teagasc.
Regarding the most recent discussions on imposing compulsory electronic tagging, EID, for all sheep, the IFA has made the views of sheep farmers very clear to Minister, Deputy Simon Coveney, and the Department. The €2 million cost involved for sheep farmers is excessive and the derogation on lambs direct to slaughter must be maintained. In addition, the unique situation of hill sheep producers must be accommodated and central points of recording must be available to reduce paperwork and bureaucracy.
In summary, the IFA is requesting the backing of this committee in respect of increased supports for the 34,000 plus sheep farmers operating in the sector. This sector is very important and deserves its fair share.
I thank the committee for its support.
I thank the delegation and apologise for being late, but I was at a briefing.
The sheep sector is vitally important to many smaller holdings, particularly along the western seaboard where the farms are not as fragmented as along the eastern seaboard. There might be a small number of suckler cattle and sheep and the dependence on income from sheep is very high. The CSO figures show that the overall number of sheep in the June livestock survey was 5.16 million. This is up 1.3% on the 2014 figures but it identified a fall in the number of breeding ewes. In Australia and New Zealand, the production levels are around 86% of the overall sheep production in the world, but they also have a fall in the number of breeding stock. The sheep sector is at a crossroads. Farmers do not know whether to stay in sheep production, invest and continue breeding, or to have dry stock.
There are major demands on sheep farmers in spring when the ewes are lambing. It is not an attractive way of life, especially for younger farmers, and there is an issue, which I think the witnesses have touched on when they identified a need for an incentive for breeding animals. The figures would back that up. I think a decoupled payment for breeding ewes should be looked at. While the figures have remained fairly stagnant in the past four or five years, there has been a fall in breeding stock. If that fall continues, we will not be able to supply the emerging markets. The emerging markets in Europe are countries such as Germany, Sweden and the Northern European countries. We are exporting more at present to the United Kingdom and France but production of the breeding stock is up about 7% in the UK. That will obviously lead to an increasing internal supply in the UK. To try to deal with that, we must consider the emerging markets. The Far East is also an emerging market. The supply of lamb in the emerging economies is not able to meet the level of demand. There are opportunities in these markets.
I agree that Bord Bia has a role to play but the Department of Agriculture, Food and the Marine initially has a role to play in bringing about a decoupled payment for sheep, whether that should be an across the board payment per ewe up to a certain maximum number, similar to the previous payment of either £10 or £20. I think it is the right way to go. It is the only way we can incentivise production within the sector.
GLAS was mentioned as were the difficulties with the commonage. The commonage framework plans being implemented at present are causing huge difficulties. Some farmers want to have one plan in place. This is causing significant difficulties for farmers in my county with commonages. It is leading to farmers wanting to opt out of the new commonage framework plans, which is disappointing.
Bord Bia has identified emerging markets and has conducted extensive research in identifying market access. It might be an idea for the joint committee to engage with Bord Bia to ascertain what work it is doing to target some of those emerging markets. It may well say there is a lack of available supply, which goes back to breeding ewes issue.
Traditionally, lamb prices have been volatile.
Over the past two years there have been peaks and troughs in prices. They declined going into the middle or end of September and picked up again for the Christmas market but that is a cyclical issue every year. Price stability affects the lambing season because one can lamb at a certain time and hold on to lambs if one has after grass. I ask the witnesses to comment on prices in the lamb sector. Would a decoupled payment for breeding ewes bring some price stability? I know that prices are driven by the market and that the delegation will probably identify that fact.
The presentation has been helpful and useful. I support what has been said, particularly the suggestion of a decoupled payment. A lot of payment schemes, such as the TAMS, are very important to farmers who wish to invest in their farms but it takes investment to draw down funding. I would like to hear the thoughts of the witnesses on the following matter. I know a lot of farmers, and the delegation probably has the figure, who are up in years and want to hand the farm over to a family member or someone else. There is a lack of incentive for them to do so and one is nearly paid for doing nothing. I believe that an inbuilt production payment would greatly assist the sheep sector.
I thank Mr. Downey and Mr. Lynskey for their presentations today. Those of us who come from the west will fully understand and appreciate their contributions, suggestions and ideas. One realises, particularly when one comes from hilly land and areas of mountain ranges, that people must make a living out of land that is far inferior to other parts of the country. Survival is down to the diligence, commitment and strength of the people involved in the sector which has helped in no small way to keep rural and peripheral Ireland vibrant. That vibrancy is down to the people who farm that type of land, particularly the sheep farmers.
I was struck by the statistics outlined by the delegation that there is an annual production of 58,000 tonnes and that 46,000 tonnes of it represents the third largest export in Europe. That fact shows the value of the product to rural Ireland. I was also struck by the fact that the average income is €14,500. For a considerable period I have fought here against the cutbacks to farm assist, etc. How many of the people involved in hill farming and sheep farming depend on the farm assist payment? How have the cutbacks to farm assist, over the past number of budgets, affected the livelihood of these people? A small contribution from the State can make the difference between surviving and not surviving in the areas that I referred to.
I believe that a decoupled payment for ewes would be a good move. It would be very helpful if the Government made a statement to the effect that it was prepared to concede to such a measure. It would make a huge difference to the overall production of sheep and lambs. The measure would give an element of certainty to the people who produce and work at that level. I support such a measure. The delegation mentioned a payment of €20 per ewe. That would be money well spent by the Government.
The delegation mentioned market access and the opening of trade to the US, China and other countries. Sheep farming has been the poor relation when it comes to farming. There needs to be positive discrimination towards ensuring that the people involved in the sheep sector get the best access to markets. It is important we ensure that people are not discriminated against in that regard.
The witnesses mentioned that the strong independent sheep research and advisory programme in Athenry was being maintained as a centre of excellence. There is a necessity for it and while we might all argue where it should be, I will not put a spanner in the works.
The witnesses also said the cost of compulsory electronic tagging was €2 million and that this was excessive. Is there any support from the State for this or is any support proposed? It would be to the benefit of all of us, particularly these days with so much crime in rural Ireland.
I thank Mr. Downey and Mr. Lynskey for their presentations. I agree with almost everything they said. It is vitally important we help sheep producers. They mentioned the sheep grassland payment, which was absorbed into the single farm payment and which brings us closer to the maximum more quickly than it should. Something has to be done about that. The coupled payment would be a way out of the problem but we have to be careful not to drive the numbers up and leave ourselves with the problem of overgrazing. Maybe if a coupled payment was put in place up to a maximum of €150 or €200, it could help the smaller sheep farmer and it would take less in the way of funds at a time when the money may not be there.
Another way we can help the sheep farmer would be in respect of the €1,000 that was lost in the budget cuts of 2008 and 2009. I have raised this on a number of occasions. Perhaps it could be restored by €500 over two budgets, if not by €1,000 all in one. There are 34,000 sheep farmers with 3.5 million sheep but we do not want to go back to 5 million sheep overgrazing on the hills. Even with commonage frameworks in place we still see a bit of overgrazing here and there around the country. We have to be careful not to damage the environment.
Another problem we have been raising for a while concerns sheep exports to Northern Ireland via the marts. Sheep going from a farm can travel freely but if Northern Ireland people want to come down to Wicklow or Carlow, as they often do at this time of the year, to buy ewes to breed them, there is a difficulty getting them from the marts to Northern Ireland.
On the coupled payment, we see €52 million going into beef genomics and something along those lines should be done for the sheep sector. The STAP programme is very good in its own way in bringing farmers out and getting discussions going but we have to target sheep farmers, particularly young farmers starting off, to encourage them to stay with the business. We do not want numbers to fall any more.
As other members have pointed out, farm assist is a problem and we regularly get calls on that subject. We have to support those people who are dependent on sheep farming and the farm assist will help to boost their income in difficult areas.
I thank the members of the IFA for their presentation. As they outlined, the sheep industry is a very important part of our overall agricultural package. It supported the economy when we were in the doldrums and it is important we do not lose sight, as we have done previously, of the role agriculture plays. Not every acre of land in this country is suitable for dairy or beef production and a lot of sheep production is in areas of natural constraint. I agree with Mr. Lynskey that we should try to restore the payment under the old disadvantaged areas scheme, now known as the area of natural constraints scheme, back to its 2008 level. It is important, not only for rural Ireland, to keep people in active farming in those areas.
It is important farmers in beef and sheep production are allowed draw a knowledge transfer payment for both sections rather than a joint payment and we will have to lobby the Minister on this.
Fencing should be included in TAMS II. We can spend up to €100,000 on a milking parlour and get support from TAMS but if somebody spends up to €5,000 on fencing, which is very important for his or her type of farming, that must be included in TAMS II. The committee must take that up with the Minister for Agriculture, Food and the Marine.
Many have expressed support for coupled payments. As a nation we have moved away from coupled payments. I always supported them for sheep and suckler herds. We have progressed the suckler herd into the beef genomics programme to try to improve the quality of the suckler herd. We could bring up a similar scheme for sheep. We would be starting from a low base because we do not have the research criteria. Something like that would be better than a coupled payment which might damage the industry by increasing numbers for the sake of increasing them, whereas it would be important if people were paid some sort of incentive for improving their breed, their herd and sheep flocks.
Young farmers are very important. Maybe the IFA witnesses could tell us how many young people are involved in sheep farming. It was not a sexy thing to be in. Sheep farming is a hard way of life. One can put a cow up a crush but when you want to do something with a sheep you have to catch it. It is a physically demanding job. Young people will not go into it unless they can get a financial return. Lamb prices have been fairly steady and good for the past year but because prices were depressed for three or four years there was no incentive for people to stay in sheep production.
It is important that fencing be included in TAMS II. The knowledge transferred is that farmers are entitled to both payments. I question the coupled payment but there has to be some support, in a different way and given the areas of natural constraint. With the economy picking up and a few more quid in the coffers, it is time to restore those cuts because the areas involved in sheep production are those under natural constraint and it would be a way to keep people in active farming in these areas.
I welcome the IFA representatives and thank them for their presentation. I generally support the idea of helping the sheep industry in any way possible because it is a tough sector of business to be in. If a coupled payment was announced where would it come from? There are 3.5 million ewes in the country. Will that come from the rural development plan or is there scope within the rural development programme to get more on top of GLAS, TAMS, knowledge transfer and the other schemes? Is the door closed for another scheme within that programme or must we go back to the European kitty for an extension? I would like that clarified. The concept is good but as Senator O’Neill said we do not need to increase numbers for the sake of increasing them. We need quality.
The knowledge transfer programme has been very successful and that could be developed further with farmers coming together. I hope I am wrong but I think getting young farmers involved in the sheep industry will be a huge challenge. As Senator O’Neill said, it is not “sexy” to be involved in the sheep industry. It was not sexy to be involved in agriculture during the so-called Celtic tiger years, not alone the sheep industry. I hope we will not go back down that road. Agriculture has been the driving force behind the rebuilding of this economy and it needs to be developed and protected for the future. The key is to get more young farmers involved and create an incentive for them. In some parts of south Carlow there are commonage issues. Senator Comiskey spoke about over-grazing. There may be under-grazing soon. The majority of sheep farmers who have rights on hills are elderly farmers who have nobody coming after them.
At more than 80 years of age, they will not go up a hill to run around after a sheep for half the day. What will happen to them and to those rights in the future are major issues to be teased out. It was a mistake not to include them in the TAMS. Hopefully, the Minister will row back on that in respect of sheep fencing. I tabled parliamentary questions in that regard last week and I hope there will be a bit of a row back, which would be helpful. It is important that younger farmers get involved in the industry.
I agree with the comments of previous speakers. I also agree that the coupling payment needs to be more incentivised in the context of quality and productivity and it should be measured. Ireland averages €6.35 a head while the other 22 member states average €12 a head. Why is there such a massive gap?
I am taken by the commonage issue and how we must address that. Donegal has 5,607 flocks while Galway has 4,148 flocks. It is vital that we retain the livelihoods of these farmers and the tradition in the west. We are turning over €250 million in exports from this industry. We were over-grazing at one stage but that has been addressed. Bord Bia will find the markets for the farmers and we must get that right. The proposal regarding TAMS and fencing is a no-brainer.
We all appreciate the sheep industry is an important industry in its own right and I can assure those present that it is important also in the midlands because some of them might be getting mixed up. Sheep are important as part of a mixed farming enterprise and they play a pivotal role in grassland and pasture management and environmental enhancement. I have a brother involved in the industry but none of my nieces or nephews are too interested in it because it is not attractive. Sheep farming is labour intensive, which is lost on many people. The hole in the bucket for sheep farmers is the failure to have their entity specifically identified as such within the CAP reform structure and to have a specific payment for them. I do not ever fear a return to the late 1980s and early 1990s when Ireland had 5 million sheep. Everyone in the place had a sheep, including those who did not know the difference between a sheep and a cat. We do not want that again. I can recall what happened. Land was taken willy nilly just to get the sheep. That is a road to nowhere. We were up that road and we are now on a road to sustainability and we are trying to ensure that. That is why any aid that is secured must be targeted. It should be targeted at the flock. It is no use having a flock owner with 10,000 sheep. In the west, in particular, there has to be a cut-off point. This takes a little thinking. There is no use diving in, being halfway across the pool and drowning. We have to think about this and work it out properly. I have no choice to support this because there are significant sheep farmers around Ballynacargy where I come from.
They have always voted for me up to now because they had no one else. The IFA has identified a figure of €25 million and the issue is how we secure it. It is important because many people are digging in and there is a constrained amount available. This will be supplemented by giving access to a number of specific schemes. It is a little irritating that significant grant aid can be secured in one sector but a sector such as this is the poor relation with little done in respect of fencing and management issues. Money could be provided and it would only require a small amount.
It is small money because at that level €2,000, €3,000 or €5,000 is the equivalent of €150,000 at another. The TAMS II scheme must be looked at again because it could be an area of interest.
I am also supportive of the idea that any support for which we can argue and secure should be directed at active farmers. That is a matter about which I feel strongly. The provision of support for farmers who are on their farms night and day and get up at 3 a.m. with weanlings and so on is very important.
It is also important not to omit market initiatives that could be taken. I have no doubts about the role played by Bord Bia, Mr. Aidan Cotter and others. We have the best beef and sheep marketing board in Europe and it can continue to play a constructive role in marketing and other related areas, even in the home market. On a trip to France in the early 1990s I recall going to the big Rungis market at 4 a.m. and remember distinctly how preferential treatment was given to home product over Irish product, some of which had been brought in from my own area, Kilbeggan. I wonder if that is still the way it is? In trying to break into these markets I wonder if home produce is still given preferential treatment? Notwithstanding the fact that there is equal access to markets and everything else, are we still at the stage where countries always hoist their own flags? If that is the case, we should hoist our flag and make sure domestic consumers also appreciate the value of the very good product we produce.
Mr. Eddie Downey:
I thank members for their comments, all of which were positive. Many people talk about the west and small farmers, particularly sheep farmers, but we need to lose sight of and move beyond that issue at this stage. Quite simply, we want to have a balanced industry across the country. In order to have a viable sheep sector we need to have lowland and upland sheep. It is clear from all of the reforms and support mechanisms put in place that direct supports drive numbers and output. There is a concern, which was expressed by some members, about the effect this can have on the environment and associated issues, but if we can drive numbers and output, it will secure a supply of product to keep the factories in place and jobs secure. On top of this, while we develop and break into new markets, we can guarantee a continued supply over the full year. There is no point in getting into a market for a couple of months and then being out of it for the rest of the year; it is simply not viable to do so. That aspect is of critical importance to us.
On the environmental side, many have talked about commonages and our position on them. In terms of what we need to consider, we have to be clear on what has always been our position. We need individual plans for individual commonages. Once we have done this we have to revisit and examine the need for flexibility to allow active farmers to farm commonages in the correct way. This can be measured and done on a planned basis, but we need to have a plan to make sure it will happen.
GLAS presents a huge problem for us because we see the exclusion from it of low input grasslands. This will have a huge effect on farmers through the halving of the amount of land in respect of which they can submit applications. That has to be reversed. Put simply, if the Minister takes something out of the scheme, surely additional measures should be included to act as a counterbalance if there is overuse of a particular measure.
Another important issue raised was succession and the need to get young people involved in the industry. Members have read our pre-budget submission in which we raise the issue of the phased transfer of farms from one generation to another. We need to deal with that process in a stronger way. In addition, we must ensure the leasing incentives in place will continue to work. I will leave the question of farm assist to Mr. Kinsella who might be able to give more details and outline the current position on the scheme.
This is a low income sector which relies on a suite of schemes and payments. I refer to the sheep technology adoption programme, STAP and the farm assist scheme, but what is vital is a direct payment which we see as essential in the future.
A few members mentioned the facilities in Athenry. I want to make it absolutely clear that there is a need for a centre of excellence for the sheep sector. The facilities are available in Athenry, but that initiative has to be driven and we need to get real results from it.
I will leave the issue of tagging to the chairman, if he wishes to address it.
Senator Comiskey raised the issue of how vital it is to rural areas to have these schemes in place. The issue of exports to Northern Ireland continues to be a problem for us. We need to examine this, both on the cattle side and the sheep side. There must be give on this because we are excluded from direct sales to our nearest neighbour and our cattle have been discounted in those markets. That is not acceptable and we need to look at that area in more detail.
Restoring the disadvantaged areas payment would be a huge vote of confidence in this whole area. Allowing farmers to participate in two of the discussion group payments is essential. The value of these discussion groups and the knowledge that has transferred directly to farmers has been phenomenal. One of the key things to emerge from discussion groups is the value of paddock grazing and rotational grazing. To make that happen, it is essential that one has proper fencing and yet we have the targeted agriculture modernisation scheme, TAMS II, which excludes that. It is a no-brainer to me. Payments need to be made in that respect.
Schemes should be an incentive to improve, not just a payment for having sheep. Deputy Penrose stated very clearly the difference between a cat and a sheep. While that might be a stretch, we want people who want to farm these areas and learn the skills associated with farming difficult areas.
While overgrazing is a problem, a whole new set of quotas from Europe has been put in place. We have the environmental quota which restricts the number of animals that can be put in an area. The risk of overgrazing in commonage areas has been reduced because there will be individual plans for each of these areas with which farmers will have to comply. I do not see that as a risk. These can be used flexibly to manage it; to put extra sheep to get it under control and then put a correct management figure on it.
Deputy Penrose raised the issue of the Rungis market in France. What he saw happen there in the past has actually increased. The renationalisation of European markets is absolutely clear. We see what is happening in the UK with the little Red Tractor food standard symbol. I always say we want to be in the little trailer behind the red tractor, not in the skip. If they are bringing us along in a trailer, we are selling on an equal footing. If they put us in the skip, we are dumping in there. We are the largest exporter of beef to the UK and 90% of our agricultural produce goes there. We can damage markets just as quickly as we can protect and look after them. The French market now has a flag system that is making a difference. We were promised a free European market but it is going in the opposite direction.
Mr. John Lynskey:
Across the board, the impression has been given that sheep farming is the poor relation, which is absolutely correct. Once that is realised, we can move on. We need our fair share of the supports. This is why we want to ensure the sector, the poor relation, get its fair share of the supports available to maintain it. In 2002, when we were down at around 1.2 million ewes, the IFA fought a battle for the sheep grassland scheme, which was introduced in 2008. It was not a huge payment but enough to grow numbers to 2.5 million ewes. The numbers stabilised over several years and, over the past two years, lamb prices have been reasonably stable. However, ewe numbers have dropped.
We see a drop because this payment has slipped from being a targeted support for sheep into the CAP payment. This is where we are at and why we are here looking for support to get a fair share to maintain sheep numbers, maintain meat factories around the country and maintain the markets mentioned. Therefore, it is vital that a support is available to maintain the numbers. We do not believe there is any basis for the fear of overgrazing and of driving numbers to the highs of the late 1990s if the support is targeted correctly to the sector to support productive farmers willing to do a good job, producing lamb. There is a market deficit in Europe. Reference was made to the increase in sheep numbers in the UK. The UK can consume the exact amount of lamb it produces, but it imports a cheaper New Zealand lamb and exports some of its own. That is the position. Sheep numbers are falling right across Europe, so the prospects are there of a market for our lamb.
We have pointed out that full electronic identification, EID, across the board would cost sheep farmers in the region of €2 million or €2.2 million per year without any noticeable benefits to them. In our discussions with the Department on the matter, it said there is no issue on traceability where lambs go direct to slaughter from the original farm where the lamb is produced. The Department does not have a problem with that position and we are looking for the derogation to continue. In the case of light hill store lambs, which are sold for approximately €25 to €50 per head, placing a tag costing in the region of €1.40 to €1.60 per head is an excessive charge for the sector. Work needs to be done to ensure fair play for all lamb producers.
Mr. Pat Smith:
Progress could be made in three areas now and the good offices of the Deputies and Senators are required. The changes proposed on GLAS in recent weeks discriminate massively against the small, mixed sheep and dry stock sector and must be addressed. Part of the way to address it is for the Minister to allow 20,000 into GLAS rather than 7,000 to 10,000 extra. That would take some of the pressure off the system and it could be done now. The payments could be managed as we go forward, but that is a key priority.
The second thing that could be done at the stroke of a pen is sheep fencing. We must accept that it was a mistake. That could be done now. Knowledge transfer could be doubled up. Sheep farmers could enter two schemes in the past but now they can only enter one. There is a benefit for the industry. While it might not be the full payment, there should be an acceptance of the benefit of it and there should be a payment now. Those are three things that could be done now and that would show the 34,000 sheep farmers that the Government is interested in their industry. Another thing that could be done is that the Minister could make a commitment to the sheep industry that, as and when funds become available, it would be prioritised for a direct payment of €25 million.
Mr. Kevin Kinsella:
In line with my colleagues, I thank all the Deputies for their support for the proposals we have put forward. It is very clear there is broad support for those proposals. That is related to the fact that, first, the people here are in touch with their sheep farmer constituents on the ground and, second, our national sheep committee is also at that same place so there is a general consensus on what is the right thing to do, and there is consensus in the committee in that regard, which is positive.
In a broader sense, it is very important for the sheep sector that we maintain our critical mass. I would be very concerned if we were to move toward or fall below 2 million ewes.
That would be a serious situation because at that stage we would lose factories, markets and customers and we would not get them back because we would not have the critical mass. In order to deal with organisations such as Carrefour, Intermarché or Casino, it is necessary to be at that level.
We lost a meat plant close to where the Chairman lives in the past two years. That was a pretty serious blow and we need to ensure we do not lose another. In that regard, we have clearly identified today what needs to be done, as outlined to the committee. Twenty-two countries across Europe are not silly. They have identified this and taken a decision. It is not an easy decision and it gets complex, as Mr. Pat Smith said. The funding comes from CAP Pillar 1 for those going down a coupled route or, alternatively, it is some combination. We have €580 million per annum in RDP funding over the coming years. There are adequate resources in the system to try to prioritise some level of payment for the sheep sector and that is what we are asking the committee to support.
Mr. Downey highlighted one figure that stood out for me. Professor Alan Renwick from UCD identified that every €1 of support to the sheep sector delivers €2.70 in overall economic output in the rural areas we are all trying to maintain and support positively.
Senator Ó Domhnaill asked about farm assist. I do not have the precise figures for the number of sheep farmers eligible for farm assist; we can get those. There is an increase in these remote rural areas where sheep farming is important. That is directly linked back to the reduction in the level of direct payments that have gone in in the past. I refer in particular to REPS and the disadvantaged area cuts that a number of members of the committee clearly said need to be addressed.
Senator Comiskey and a number of others asked about the Northern Ireland issue. On sheep, it is very specific. There are two markets here. There is one for breeding animals coming from the Chairman's county and another of other counties. Under current EU regulations, live breeding animals may not be exported to another EU country unless they have been tested and the flock has been certified as TSE free, which is almost impossible in an Irish context. As Mr. Downey said, we need discussions with our Northern colleagues to resolve that trade issue whereby we are prevented from trading on the cattle and sheep side with Northern Ireland in an uninhibited way that can let that market free up. We need to bear in mind that approximately 400,000 or 500,000 lambs come south for slaughter and we cannot send our breeding animals back up north. That is not acceptable and needs to be addressed. We have looked at it very closely and it is very difficult to address within the regulation. It needs more attention.
I thank the Chairman for this opportunity. We very much appreciate the support the committee has given for additional supports for the sheep sector.
Mr. Kinsella spoke about exporting breeding stock to Northern Ireland. Does the same apply to animals for slaughter? I recently came across an issue with a restriction on cast ewes moving from marts in my part of the country to Northern Ireland and England. Is it the same issue?
Mr. Kinsella said that there was need for an agreed position in order for trade to be uninhibited. I assume he is talking about an agreed position among farmer representatives in both the Twenty-six Counties and the Six Counties, as well as political recognition between the Minister, Michelle O'Neill, MLA, and the Minister, Deputy Coveney.
The introduction of the sheep grassland scheme had a significant impact on the industry. It was later amalgamated with the area based payment. Many sheep farmers felt cheated by that. A specific payment needs to be put in place. We have already seen the closure of the processing facility in Hackettstown. Unless this industry is supported, other processing facilities across the country will close. Every other aspect of the agriculture industry is being supported. We need a targeted scheme for the sheep industry.
In regard to what we, as a committee, can do to advance this issue, it would be in our interest to meet the IFA's counterparts in the North and for the IFA to address the committee in the Six Counties. There is a need for that type of joined up approach. Everybody appears to be in favour of resolving the issue but nothing is happening, despite everybody's best efforts.
Members of the Northern Assembly were due to appear before the committee next week but owing to matters currently ongoing in the North, they have deferred doing so until December. The point has been raised at every joint Border committee meeting.
I thank members their contributions to this discussion. I come from the country which has the highest average flock. I am also a sheep farmer. Sheep production in this country comprises two categories, namely, low-land flocks, which are mainly big commercial flocks, and upland flocks, both of which have a role to play. As stated by Mr. Downey, we need to have this industry across all sectors. Deputy Penrose made the point that the industry contributes enormously to good soil and grassland management and, in particular, to the control of diseases such as ragwort. It is easy to identify a farm that has sheep because there is never any ragwort evident on it. That is a very basic, simple fact of life.
Sheepmeat, which is probably the healthiest red meat on the market, is in danger of being defined as a luxury product as opposed to a product accessible to the masses. Chicken is probably the greatest competitor of sheep, pig and other meat products.
On the points raised during today's meeting by the IFA, there is widespread support for the TAMS to include fencing. As has been stated, sheep will never stay where they are put. They must be controlled. It is important GLAS and other commonage schemes provide for sufficient numbers of people who want to produce sheep. Sheep must be part and parcel of the plan. In other words, this should form part of the incentive of having sheep in the uplands.
With regard to marketing, I have already addressed that point. On EID, I would like to float a suggestion. I agree with the proposal in relation to the two derogations. However, in my opinion, two yields should derive from EID tagging.
One advantage is that it does away with paperwork. If a farmer decides to sell animals and they are EID, the responsibility is to get feedback from the mart or whomever with a paper or electronic readout that is theirs, so they just tag them and bring them in. There should be a common sense approach to lost tags and lost animals, especially on uplands. This could form part of a genomics-type scheme to deal with TSE or scrapie. A number of animals are tested - maybe 5% per annum - and that might be agreeable to achieve scrapie-free status, especially for sires, in particular, where the target has to be.
Those are some of the ideas that should be examined in greater detail. However, the coupled payment has to be incentivised for improved animal health and production. One is not going to get it otherwise. The knowledge transfer must form part of that because we have seen the value of it. To get 4,000 out of 34,000 is a start but it is nowhere near acceptable when one considers that probably half the country's dairy farmers are part of discussion groups. That should be the ultimate target.
In the early 1980s, New Zealand had 70 million sheep but it is probably back down to half that number now. Lamb production, however, while not the same, is very nearly the same through better flock management, grassland and management skills. That was only gained by knowledge and research. A Teagasc centre of excellence in Athenry would, therefore, be crucial to developing that, along with better farm programmes.
I understand that Mr. Downey and Mr. Smith are staying and that we are moving the discussion from rom sheep to the dairy sector. I wish to thank Mr. Lynskey, Mr. Shields and Mr. Kinsella for appearing before the joint committee.
I will now suspend the meeting to allow the new witnesses to take their seats.