Pat Deering (Carlow-Kilkenny, Fine Gael)
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I would like to welcome the members of the two groups that will contribute to the next part of this afternoon's meeting. I welcome Mr. Patrick Kent, who is the president of the Irish Cattle and Sheep Farmers Association; Mr. John Brooks, who is the association's sheep chairman, Mr. Edmond Phelan, who is the association's beef chairman; and Ms Neassa Fitzgibbon, who is the public relations officer of the association. I also welcome Mr. Seán Finan, who is the national president of Macra na Feirme; Mr. Bryan Hynes, who is the chairman of Macra na Feirme's agricultural affairs committee; Mr. Edmond Connolly, who is Macra na Feirme's chief executive officer; and Mr. Derrie Dillon, who is the agricultural affairs manager of Macra na Feirme. I thank them for coming before the joint committee today.

The witnesses probably heard what the Chairman said about the matter of privilege earlier, but I have to go through it again. I want to bring it to their attention that they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they 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 they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him or her identifiable.

I am aware that there might be a vote in the Dáil on the Order of Business at 4.45 p.m. I mention that to let the witnesses know in advance that we might need to suspend the sitting. I ask Mr. Kent to make his presentation, to be followed by Mr. Finan if that is all right.

Mr. Patrick Kent:

I thank the committee for inviting us. While we all know there has been a substantial drop in milk prices, the beef and sheep sectors must not be forgotten. We have this kind of crisis virtually every year. It seems to be ongoing. Lack of income is a major issue in both the beef and sheep sectors. Many of our members have expressed amazement at how quickly a crisis in the dairy sector was dealt with by the Council of Ministers and the European Commission, with the result that a package of almost €14 million was delivered to Irish farmers, of which beef and sheep farmers received nothing. One would think beef and sheep farmers were in clover. However, 12 months ago, when beef was in deep crisis all we got was a beef forum. When Teagasc finalises our income figures for 2014, I confidently predict that the dairy incomes will still be higher than beef, sheep or suckler incomes. Let us not dwell on this.

I will outline where we are heading in the next 12 months. On a macro level, we are very concerned at the potential for damage to our sector from a bad Transatlantic Trade and Investment Partnership, TTIP deal. As we speak, EU and US negotiators are working behind closed doors to put a deal together. The lead negotiator for the EU is the trade commissioner, Cecilia Malmström. The Department of Jobs, Enterprise and Innovation commissioned Copenhagen Economics to do an impact analysis of a potential trade deal for Ireland. The conclusion was that the beef sector was the likely loser whereas dairy might gain. ICSA recently attended a public meeting in the European Parliament under the patronage of Paolo de Castro, MEP, where the risks of a bad deal from TTIP became apparent. Many of the other member states are preoccupied with having their geographical indications for products such as wine and cheese protected. The risk is that this will trump beef when it comes to the 11th hour negotiations on the finer detail.

ICSA made it clear in Brussels that the Irish beef sector was very vulnerable. The problem is compounded by the fact that there are several trade deals in the offing. The Canada-EU Comprehensive Economic and Trade Agreement, CETA, has been concluded with a big increase in quota for Canadian beef imports. However, it is less well known that trade talks between the EU and Australia-New Zealand are getting under way and we must not forget that the Mercosur bloc has not gone away either. The threat of all these trade deals coming together with concessions repeatedly being given on beef imports is an appalling vista for our sector. Two issues are prominent. First, we must fight tooth and nail to minimise additional tariff-free quotas for beef imports from all these countries. Second, we must fight to protect EU standards of production.

The production standards in some of these countries leave much to be desired from a human health perspective. There is much genetic modification and high levels of pesticides, hormones and antibiotics are used in production in massive, factory-type feed lots, which contrast with the natural production we do here in Ireland. We need a higher return on what is a much healthier product for the consumer. The risk is that, rather than keeping the bar high at the EU standard, there could be mutual recognition of standards, which would be very damaging to our beef sector. We need Irish politicians and the Government to shout very loudly in the coming weeks and months to ensure any deal does not involve a sell out for the Irish beef sector. We are concerned that a fear of upsetting multinationals is weakening our national position on this. We seem to be cap in hand for a few jobs from major multinationals. Irish companies employ more people in the US than US companies employ here.

This brings me to another concern, which is that our position on GM is leaving us vulnerable on the marketing front. By the 3 October deadline, 19 of the 28 EU member states had decided to opt out of growing GM crops. Why was Ireland not one of those? It is a very serious question, and our politicians have let us down. Our neighbours and competitors, Northern Ireland, Wales and Scotland, all felt it was necessary to protect their interests in having a clean, green image and to demonstrate that they were in tune with consumer sentiment. Any surveys done have shown that consumers are overwhelmingly in favour of having clean, green, GM-free products, and more than 90% of consumers want this type of product. I am also concerned that key markets for Irish produce, such as Germany, France and Italy, have also decided to opt out.

Like it or not, many consumers are concerned about GM production methods. Ireland's marketing strategy is to develop the Origin Green ideal, but we may be in danger of shooting ourselves in the foot on this one, especially when one considers that exporting beef and sheepmeat to discerning consumers is far more important than any possible change, with dubious benefits, to crop growing systems in this country. There is no GM crop we can grow here that would be of any benefit and we should have opted out on this immediately.

We also must consider the way in which the food chain is not working for beef and sheep producers. We have seen over-regulation of farmers but hardly any regulation further down the chain. The money flow back to farmers has been totally neglected. We must become cognisant of that fact. The fact that the profit is not coming back to the farmer is being neglected, and the big multinational supermarkets and processors seem to be getting bigger and more powerful all the time.

In our view, two items are now essential. First, we need the Commissioner to introduce robust regulation of the food chain across all 28 EU member states. This means setting up a European authority or regulator to investigate who gets what from the food chain. In our view, the farmer does all the work and the processors and retailers virtually get all the profit. The finances of farmers are transparent but we know nothing of the margins made by multinational retailers when it comes to key products such as beef, lamb and dairy. This cannot be allowed to continue. The second essential item is closer regulation of the processing part of the chain, which could be done at national level. We need to monitor much more carefully what goes on in meat factories. Issues such as angle of neck cut and trimming are not being dealt with satisfactorily at present. There are also question marks over grading issues.

We believe that factories should not be allowed to own and control feedlots and in the process have the ability to pull prices as it suits them. We propose that the Oireachtas committee consider examining whether this practice is in keeping with competition law - the Competition Authority was quick to come in when we were at the round table last year and we do not see it coming in and giving us any assistance on this matter - and whether it is possible to legislate against it. We need legislation. For sure, farmers know that factory-controlled feedlots are now having a huge impact on the store trade and the beef trade, and we are the losers.

We also suggest that there is not enough focus on live exports, for both cattle and sheep. ICSA is concerned that live cattle exports have dropped drastically this year, down some 50,000 head, or 25%, on the corresponding period last year. Overall we will struggle to hit 180,000 in total live exports this year. That compares unfavourably with 338,000 head in 2010. Excessive bureaucracy is also hindering live exports of sheep. The ICSA believes that the Minister needs to put the same energy into opening live export markets that was put into getting beef exports to China and the United States. It is clear to us that success in expanding live exports will be far more beneficial to livestock farmers than any gains in China or the United States. For example, it is now time to talk to the Egyptian authorities about clearing the way for live exports. It is no harm to remind ourselves that dairy expansion will lead to a lot of extra calves, and it is a matter of urgency to have markets for them. Also, we must express frustration that the 30 month issue remains unresolved.

On sheep, I want to mention moves to increase electronic tagging by the Department. ICSA is yet to be convinced that this will do anything other than increase costs for farmers. We are particularly adamant that there is no justification for electronic tagging of sheep going direct to slaughter in meat plants. ICSA is also concerned that electronic identification, EID, will be uneconomic for hill sheep farmers who have no choice but to sell low-value lambs in marts. While there is a benefit to farmers buying store lambs, ICSA believes that increased cost around EID must be accompanied by a more practical approach on tagging at inspection time, especially for hoggets in the new year.

ICSA is also concerned at suggestions that the Department may consider introducing a single supplier for sheep tags. Competition is essential. In fact, we believe that there should be competition in the supply of cattle tags as well. This is not just about the cost of the initial tags; it is also about the cost and frequency of replacing tags. We believe that we are unfairly incurring costs as a result of having only one cattle tag supplier.

Regarding the future, ICSA believes that more must be done in the rural development budget for sheep farmers.

We have welcomed the decision to allow sheep fencing back into TAMS, but there is a need for a sheep scheme. Suckler farmers have the beef data and genomics programme, but sheep farmers have nothing.

Given the slow roll-out of the rural development programme, RDP, against the backdrop of a CAP reform process, it seems there will be a need to ensure that all funds in the RDP are used. For instance, the recent budget is forecasting a spend of €494 million in 2016. This suggests that for each subsequent year, average spend in the programme will have to exceed €590 million. The ICSA proposes that a sheep scheme could be funded up to €25 million per annum within the RDP limits, or with a small top-up from Exchequer funds. One amendment per annum to the programme is allowed and we need to consider this at the earliest possible stage. We also believe that sheep farmers should be allowed to benefit from participation in two knowledge transfer programmes.

The recent decision to halve the maximum area allowed under the low-input permanent pasture measure in GLAS is the wrong one. Our concern is that the scheme is becoming totally unattractive to many smaller and medium-scale cattle and sheep farmers. The ICSA has also been campaigning for a scheme for hen harrier farmers, who have been treated very badly over a number of years, and we welcome the possibility of doing something under the locally led environmental schemes. However, we are concerned that this could turn into a bureaucratic nightmare with high consultancy costs.

We need a scheme that will pay farmers for every hectare of designated land. Under GLAS, there is a potential maximum payment on up to 19 ha, but many farmers have more designated ground. A key issue will be whether we can find a more flexible approach on afforestation in the hen harrier areas. The blanket ban on forestry is not supported by the scientific evidence and we need a less dogmatic approach on this.

I thank the Chairman and members of the committee for their time. My colleagues and I are available to answer any questions they may have.

Mr. Seán Finan:

I thank the committee for giving Macra na Feirme the opportunity to come in today and discuss our thoughts on the future development of the dairy industry. I am delighted to be joined by my colleagues Mr. Bryan Hynes, the chairperson of our agricultural affairs committee, Mr. Edmond Connolly, our CEO, and Mr. Derrie Dillon, our rural and cultural affairs manager. Macra na Feirme's presentation will highlight the huge development potential and opportunities for young dairy farmers after the abolition of the milk quota. We will also highlight how policy-makers, co-operatives, industry and farmers working together on the issues affecting the industry can result in young farmers availing of the exciting opportunities that exist in dairying.

The issues that affect young dairy farmers, affecting their future development potential and the decisions they make in their careers, are generally the same as those affecting all young farmers regardless of their enterprise. My presentation will reflect and outline some of the general challenges and issues facing young farmers in the development of our businesses as well as identifying potential solutions.

This is a great time to be a young farmer entering the industry and also for those who are established and trying to grow and drive forward their business. Huge opportunities exist and the future is bright for young, trained, energetic, technically proficient, business-minded young farmers. Young farmers believe that due to a combination of factors, including expanding international demand for food, the ambitious targets set out in Food Wise 2025, mandatory measures for young farmers in CAP reform and milk quota abolition, it certainly is a time of opportunity. However, the number of dairy farms in Ireland and across the EU is decreasing year on year, according to the Directorate-General for Agriculture and Rural Development, and it is important that we address this by ensuring young dairy farmers are encouraged and supported in entering the industry. Encouraging young people into dairying creates job and career opportunities and provides for a multiplier effect in rural areas that supports businesses and rural communities.

As the new generation of farmers, we will have to be technically proficient in our approach to the running of our businesses, focusing on the drivers of profitability on our farms, utilisation of grass, soil fertility, improvements in breeding, and adopting sustainable practices such as the principles of the Bord Bia Origin Green initiative. This excellent initiative makes Ireland a world leader in food production and highlights the sustainability of the Irish agriculture industry.

As the representative body for young farmers, Macra na Feirme hears from our members about the issues on the ground that challenge young dairy farmers and, indeed, all young farmers. The common barriers for young farmers progressing within the industry are access to land, credit and education. Macra na Feirme was founded in 1944 to educate young farmers and improve their practical farming skills.

Macra na Feirme was founded in 1944 to educate young farmers and help them to develop the practical skills of farming. We encourage young farmers to engage with formal education. We also encourage young farmers during their farming career to develop themselves through engagement in continued professional development and further training. Continued professional development is common in other professions, but a recent young farmer training needs analysis carried out by Macra na Feirme identified that there was no real tradition of young farmers engaging in or completing further training. What we are seeing is that when young farmers return home and have been farming for a few years, they realise at that stage that they need further training in the skills required to be successful. Macra na Feirme provides this continued professional development and practical experience through our Macra na Feirme young farmer Skillnets programme. This focuses on three main areas that young farmers identified in the training needs analysis: business, technical and personal. This programme is intended as an add-on to the formal education that young farmers receive. Programmes and structures that encourage young dairy farmers to get involved in their co-operatives and processing industry are also essential to ensure that innovation, energy and leadership are part of the future of the industry. Macra currently partners with ICOS and Teagasc to deliver training opportunities in this area.

Access to formal education is an issue that young farmers have identified. To comply with the requirements of the new mandatory CAP measures, young farmers have to have started their agricultural education by September 2016. The Government and Teagasc must ensure that sufficient resources are provided for our formal agriculture education system to ensure that young farmers can get their agricultural education and that this education is to the highest standard and equips young farmers with the knowledge and skills they require. As young farmers, we are businessmen and women, and successful businesses require long-term planning, both financial and strategic. Macra na Feirme encourages young farmers to improve their skills and take the next steps to improve their efficiency and technical ability. These steps will result in increased profitability at farm level within their businesses and allow them to add value, drive output and develop their enterprises.

Macra na Feirme continues to work on the access to land issue and delivers a programme in land mobility through our land mobility service. The land mobility service sums up what our organisation can positively contribute to the industry. Young farmers first identified land mobility as an issue affecting them. We commissioned a land mobility and succession report to give us the evidence. It found that 48% of farmers over 50 had no identified successor. A service was then devised and rolled out. This service means that land is now easier to access for young farmers. The service is about getting more young blood into the industry through collaborative arrangements such as long-term leases, partnerships and share farming agreements. I am delighted to inform the committee that the service is growing steadily, with more than 350 clients and approximately 140 arrangements in place. I would like to acknowledge the contributions that the various stakeholders make to the service.

Mr. Seán Finan:

The measures introduced in last year’s budget to incentivise long-term leasing have been very important in encouraging farmers to move away from conacre agreements to more long-term arrangements, and the newly announced farm transfer partnership proposal is also very welcome. The land mobility service is contributing to the development of the dairy industry by providing new blood to the industry and encouraging young and older farmers to work together to grow their farm businesses. Since the abolition of the milk quota, dairy farmers are focusing more on milk production output. The rearing of replacement dairy stock consumes land that could otherwise be used for milk production. The result is a spin-off enterprise that offers huge potential for farmers in more marginal areas to supplement their businesses or run contract rearing operations. This is a positive initiative which has huge potential and we need to encourage more of these types of arrangement. Contract rearing is an enterprise that dry stock farmers could look at to run alongside their existing enterprises as a way of increasing stocking rates and output. The land mobility service has established a number of successful contract rearing arrangements across the country.

We welcome the new partnership register of Department of Agriculture, Food and the Marine, and we are calling for a register of share farming agreements to be put in place. There are issues to be addressed in terms of share farming, but young farmers see huge potential in this area.

The land mobility service means that land is more accessible for young people, but access to finance to pay for this land and develop our businesses is a particular challenge. In most cases, young farmers do not have the security or past track record to draw down loans when starting out.

The EU Commissioner for Agriculture and Rural Development, Phil Hogan, told our recent young farmers' conference about developments and funds available from the European Investment Bank. There does not seem to be a clear view here at a Department of Agriculture, Food and the Marine level and Government level as to how this money, at lower interest rates through the rural development programme, can be funnelled into young farmers' hands in Ireland. I would ask that the joint committee look into this issue.

In spite of the opportunities that exist, it would be remiss of me not to highlight briefly some of the challenges that remain for young farmers within the dairy industry. As the only young farmers' representative body in the country, Macra na Feirme has a huge role to play in working with young farmers and members to identify the issues, speak about solutions, find ways to address them and then lobby policy makers for change to improve our lot.

Incomes and commodity prices remain issues this year particularly in the dairy, tillage and pig sectors. Income volatility remains a huge challenge for the industry. We welcome the establishment of the dairy forum by the Minister, Deputy Coveney. At the first meeting of the dairy forum, I called for a top-up for young dairy farmers here in Ireland when the package from the EU Commission is distributed. I am delighted that the Minister has made a commitment to give young dairy farmers this top-up.

Macra na Feirme has also called for an income volatility bond to be put in place to help dairy farmers deal with the volatility and fluctuations in commodity prices, which are inevitable when selling on the world market. Our vision is that farmers in a year of strong product prices can invest money in this bond and draw it down in a year of harder economic times. This bond would go a long way towards addressing the issue of income volatility which is crippling young farmers. When we proposed this to the Department of Agriculture, Food and the Marine we were told State aid rules preclude this from being put in place. We are asking for the committee’s assistance to move this proposal forward and we would like to see the Department of Agriculture, Food and the Marine work with the EU Commission on this issue and help to develop workable solutions to overcome the State aid rules obstacles.

We are active young farmers who want to progress and develop our businesses. We will do something to get something. The CAP needs to be about rewarding active farmers, but the historical model does not promote active farming. Nothing annoys young farmers more than to see their neighbours across the ditch farming extensively with low stocking rates and next to no farming activity, while receiving a significant payment based on their activity nearly 15 years ago. Young farmers on the other side of the ditch, while very productive and driving on, have borrowings but are often receiving a very small or no basic payment.

Young farmers are happy to deliver on actions on climate change, food security and to ensure our economic viability. There are young farmers who have fallen on their feet with a top-up and national reserve, but there are farmers who have fallen through the cracks and are not eligible for any of the measures. There are farmers that are 26 years of age and eligible for no supports, and farmers who are 37 and receive all young farmer supports.

Young farmers want commitments that young farmers in the future will not fall through the cracks and this is the challenge we face in shaping the next CAP. Supporting farmers to maximise the potential of their grazing infrastructure should also be a key component of the next CAP rural development programme.

What I have outlined are the issues and the realities on the ground. I would like to thank the committee for inviting us to make these presentations today. Macra na Feirme looks forward to hearing the views of committee members as well as working with them on the issues affecting young dairy farmers and, indeed, all young farmers.

Andrew Doyle (Wicklow, Fine Gael)
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Thank you, Mr. Finan. Just before I introduce Deputy Martin Ferris, I wish to thank Deputy Deering for taking the Chair in my absence. I apologise but I had to have something done by 4.30 p.m. I now call Deputy Martin Ferris.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank both witnesses for their presentations. It is encouraging to see Mr. Finan's presentation about the future prospects for young farmers. He has identified issues including access to land, credit and education. Education will certainly play a huge role in the advancement of younger farmers in the years ahead.

Beef imports should be seen in the context of the TTIP proposals and the situation concerning production standards in the US, Canada and South America compared to those applicable in the EU. If this is going to happen, we need a level playing pitch with the same standards. Unless such operable standards are in place we should not proceed. I would like to hear Macra na Feirme's views on that when its representatives respond.

Mr. Finan mentioned the 28 EU states that opted out regarding GM. Our representatives did not take that road. Given that Scotland, Wales and the Six Counties have gone for the opt-out, does Mr. Finan believe it will have an effect on this country competing in the future, particularly with regard to good green production, environmentally friendly production and so forth?

Mr. Finan also mentioned feedlots. I have been interested in this for a considerable time. The feedlots are a mechanism to control and manipulate the market at the demand of the beef barons. What is even more annoying is that people who had held prominent positions in farming authorisations in the past are complicit in this. What can we do to stop that? Can we bring in a regulation to do that? Mr. Finan suggested these feedlots could be in breach of the competition laws or whatever. I would appreciate it if he could enlighten us further on that.

Mr. Finan stated that there has been a reduction on exports for 2015. We had a presentation to this committee which reckoned that approximately 150,000 extra cattle will come on stream in the coming year. If there are not export provisions available for that, it can have a detrimental effect on prices for the producer in terms of getting back what they need.

I am glad that serious interest is being taken regarding the victims of the hen harrier. That farmers in designated areas have been discriminated against is probably one of the greatest injustices. People living in marginal areas had their land designated, with no compensation paid, and they now find they must try to get redress at this late stage. I am glad that all the farming organisations are united behind this issue and I hope a resolution will be found that will give justice to the people who have been denied it.

Michael Comiskey (Fine Gael)
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I thank the members of the two groups for their presentations, which were very interesting. Mr. Kent spoke earlier about the drop in milk prices and so on. We all have great sympathy for people who have lost income and have made a huge investment in the milk sector, but their income is possibly higher than those of the farmers in sheep and beef. I come from a sheep and beef background.

That brings me back to 2014, which was a very difficult year for beef farming. On one occasion I was invited to Downpatrick where I saw more than 2,000 cattle from the west, and because of the stance on nomad cattle, the people there had difficulty getting those cattle slaughtered. Those people were not coming back to the South to buy store cattle, which was a huge loss, and they are missed from the marketplace.

Deputy Ferris mentioned that 150,000 extra cattle will come on stream in the next year or so and we have to be very careful to ensure the price of beef does not drop again.

We have to monitor carefully the Transatlantic Trade and Investment Partnership deal because beef certainly will be the big loser in this regard. Again, GM free growing of grain is a major concern to people, and many people raise this issue with us. I believe either an all-Ireland approach is necessary or we should work with England and Scotland on this issue to ensure our clean, green image, for which we have always been known. That might be the way forward and we should consider that.

We discussed feedlots earlier in our discussion. It has been a major worry for us over the years that when the price of store cattle is low, factories can go out can fill up their sheds and then, when the price is rising a little bit, can, by putting their cattle onto the marketplace, undermine the genuine farmer who is trying to make a living. Something needs to be put in place to address that issue.

The live exports business is very important, but the chart the delegates provided shows the drop in that sector in recent years. We must be careful not to allow it to drop further, which will require ensuring the competition is there. The sheep sector, too, must be supported but, again, we have seen a drop-off in the number of ewes in recent years. A scheme must be put in place to address this, a point we have raised on several occasions. We certainly will support the delegates' call for such a scheme. The same applies in respect of sheep exports, which is something that is particularly relevant in Border areas. We see Northern Ireland customers wanting to buy sheep from places like Wicklow and the Midlands, but there is a difficulty in bringing them from marts onto farms in the North. They have to come off a farm.

In regard to the knowledge transfer programmes, dealing with beef, dairy and sheep, it is crucial that farmers are able to participate in at least two of them. That is vital for farmers, both young and old, who want to get a little more knowledge. The money involved is not huge and I agree that farmers should be able to have two programmes running.

The delegates from Macra na Feirme will know that we work very closely with their organisation in my part of the country, which is Leitrim and Sligo. There was a reasonably good deal done for young farmers under the basic payment scheme. However, as Mr. Finan noted, a lot of young farmers fell through the cracks. There is a category of young farmers, or perhaps old young farmers, who may not have gained as much as they should have gained. Their situation must be addressed. Progress on partnerships, long-term leases and all of that is positive. It is vital that we continue to work to find new ways to ensure younger farmers can get involved in those initiatives. Our farming population is getting much too old and we must continue to see younger farmers entering the sector. We worked very closely with Macra na Feirme on the appointment of 20 new Teagasc advisers to help young farmers who must have their green cert completed by 2016. It is important that nothing is put in the way of that and people are not penalised.

On the availability of low-interest loans from the European Investment Bank, it does not matter whether a farmer is young or old; being able to access money at a low rates must be a good thing. Everything must be explored in that regard to ensure it is possible for everybody to avail of the facility.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I welcome the witnesses. The two presentations we heard cover a broad spectrum of activity which probably covers all livestock. The delegates from Macra na Feirme mainly focused on dairying, which, for reasons that are easy to understand, has been quite attractive to younger farmers in recent years. I listened with interest to a recent media interview with a former IFA chairman who has switched from beef to dairy farming in more recent times. People probably know who I am talking about without having to name him. He spoke in the interview about where the dairy sector is at and the difficulties being experienced by farmers. He also made the point, however, that difficult as this year has been, he will be in a far better position at year end than he was in the years he was involved in beef farming. There seems be no getting away from the truth of that. As Mr. Kent noted at the beginning of his contribution, beef farmers are used to ongoing volatility.

There was a particular emphasis on education in the Macra na Feirme presentation. Speaking as a farmer, one has to wonder whether we have learned anything from the beef crisis of last year or the year before. I had the opportunity last weekend to attend my local mart where I saw farmers buying weanlings at exorbitant prices. It was a happy day for sellers, but buyers must be wondering how they will make money on their purchases in a year's time or whenever.

On the previous day, the trade was good at the ordinary sales. Again, one would have to wonder if one was buying stores, how one would make money next spring. This is repetitive. Have we learned anything? Even though the price dropped three years ago for bulls, in particular, farmers were paid huge amounts for stores the previous fall. That expectation must be managed. High prices can be paid for stores in the fall but one never knows what will happen three or four months down the line and we must plan for such volatility. The same applies in the mixed sector to a certain extent.

There is plenty of evidence from New Zealand, Northern Ireland and elsewhere around the world of the difficulties dairy farmers have experienced over the past few years. They have not concentrated enough on producing as much as possible in Northern Ireland using the cheapest product they have, which is grass. That is the only way forward.

The same applies to the beef sector. The cheapest produce in this country is grass and, this year, we are fortunate to have a good supply. We want to achieve as much value out of that as possible and education is the crucial element. Knowledge transfer has been very beneficial over the past few years and many good ideas have been exchanged in that regard.

There is no doubt more young farmers need to be encouraged into the system be it in dairying, sheep or beef. The sheep sector is more challenging. It is not as attractive to younger farmers and while I may be open to correction on that, this is what I am hearing on the ground. An incentive needs to be provided in this sector. The ICSA presentation referred to the provision of a €25 million subsidy for sheep, which I would like to tease out. Is the association proposing that this would come from unspent rural development funding or would it be additional money that would have to be sourced? Is the association assuming rural development funding will be under-spent? Would Ireland have to get permission for another scheme if that was the case? Would the Minister have to go cap-in-hand to Europe again seeking permission for another scheme for sheep alone or could we devise a scheme of our own for the unspent money?

There has been a good deal of discussion about feedlots. A total of 25% of beef is produced through the feedlots at the moment. I may be open to correction on that but I saw that figure somewhere in the past. Many farmers have gone down that road and they have signed contracts in recent times with factories to produce beef in this manner. It is open to question whether it is right or wrong. Farmers in this line of business says that is the only way they can make money. One can see why that would distort the market. We need to try to balance that.

Both presentations dealt with European legislation in respect of competition in the marketplace. Everybody present is on the one page in that regard. Commissioner Hogan, shortly after he took up the position, said this was one of his key objectives. The committee produced a substantial report two years ago in this regard. European legislation seems to be the best way forward and it is crucial to move that to the next level. We have talked about it for long enough and we need to see action. Everybody needs to be on the one page to galvanise support to move it on.

Mary Ann O'Brien (Independent)
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With regard to TTIP, I would like further commentary on the concern that a fear of upsetting multinationals is weakening our national position on this.

I am very pleased to hear the witnesses' opinion on genetically modified crops. I join with them on it because we would be certifiable if we did not stand strong on this. As I said earlier this afternoon, we are small and special. We are the only country in the world that is green in a satellite picture. We can be different from the rest of the world. We should never think big; we should think big among ourselves, but we are only a spot in the world, although we are extremely special, and we must always think together about how to add value to what we grow and raise.

Mr. Patrick Kent:

On my way here I went to a sustainability summit in the Aviva Stadium, met some very interesting people and heard some interesting presentations. I was a little disappointed that the biggest presentation was by the biggest chemical company in the US, the Dow Chemical Company. Some of these chemical companies want to get control of the seeds. They sell genetically modified seeds, and under their contracts farmers must use their products, so they are forced into producing GM crops. The entire industry is based on this big chain of getting profit back to the big multinationals. They do not want labelling. In the United States they do not want food labelled, despite the fact that more than 90% of consumers want labelling. They fight us with huge funds to prevent food labelling even though consumers want to know what they are eating.

The health of consumers is decreasing. Ireland is destined to become the most obese nation in Europe in a very short time. On Sunday, a group of Swedish people came to see my cattle. I produce Belgian Blue cattle on my farm. They found it on the Internet and two busloads came to see my cattle. I also took them to a local dairy farm. I thought they were very fit and agile people. A similar busload of people from Ireland might not be quite so fit, and I fear for the health of Irish people. The announcement by the World Health Organization that sparked cancer fears was not about red meat as such but processed red meat. There is risk that it could be misinterpreted, and people will not want to eat the lovely, sumptuous grass-fed lamb and beef that we produce here, which is life-enhancing, increases longevity and reduces susceptibility to cancer, obesity and a whole lot of degenerative diseases, including brain disorders. There is a massive lack of marketing from an Irish perspective.

We have dropped the ball on this one with regard to not declaring ourselves GM-free. We cannot grow GM crops here, as there is no possible crop we can grow, but we certainly will be competing against cattle fed on genetically modified feed, antibiotics, antimicrobials and in-feed additives. In the United States, 20 feedlots produce more than half of all cattle, and if the attention of one of those feedlots was directed towards the European market it would scuttle us because their unit cost of production is much lower. There are massive question marks about the healthiness of this product. If the product from such a producer went to McDonald's it would take away a lot of our market for forequarter beef. If it went into restaurants it would take away our higher-price market. Our unit size here is quite small and we are very vulnerable. Many small family farms depend on their beef and lamb enterprises. They would be out of business. They could not survive. What will be done with all of the people leaving farming if this is not protected?

Labelling is a huge issue. Deputy Ferris mentioned the missed opportunity on GM and feedlot controls. There are a few very large factory farm units in Ireland and they receive very large single farm payments. Deputy Deering spoke about the weanling price and education. The person getting the high price for those weanlings needs every penny and I cannot say the person received too much for them.

I know the cost of production and the amount of work that goes into such a process so we cannot talk against the price of cattle. Price is open to the free market but we need more support in respect of beef. We need more investment in rural Ireland in order to make it vibrant. Recently, I spoke to a broadcaster who said there was a slight bit more buoyancy in rural Ireland because beef prices this year were not quite so bad. I said to him that if the same happened again and we got 50 cent per pound, then rural Ireland would be lifted up which would mean that people could commit and invest more. Farmers are great at spending money because they will do up a shed, extend their house or whatever. They do not pocket their profits but they need a rainy day fund, as mentioned by Deputy Martin Ferris. Mr. John Comer, who made his presentation before me, certainly referred to it. We included it in our pre-budget submissions as well. We referred to the Australian scheme whereby farmers can put their money away for a rainy day but pay tax on it later when they draw it down. For farmers, such an initiative would act as a bulwark against a bad year. Ireland suffers weather events slightly more frequently now and prices have been affected. Therefore, we need such a fund to be provided during a good year. Unfortunately, farmers have not had many good years in recent times. A fund would act as a bulwark against a bad year.

Senator Comiskey mentioned the nomadic cattle issue. I agree with him that it is a huge problem which needs to be addressed.

I have spoken to Mr. Mark Durkan, MLA, and Minister for the Environment in the North of Ireland. He had suggested to his ministerial counterpart in the South that both jurisdictions join together and declare the island a GM-free zone. He was shocked that such an initiative did not happen and he wants to know why. We need to ask the Ministers for the Environment, Community and Local Government and Agriculture, Food and the Marine why it did not happen. We have not received a satisfactory answer for why that date was passed. We need to ask why repeatedly until we get a satisfactory answer. Were these people lobbied by somebody else? I wish to declare that we lobbied them in the other direction and to declare the island a GM-free zone. If there was lobbying in the other direction, then we need to know immediately who did so and why.

There has been a drop in sheep numbers. I have a very able sheep chairman seated on my left and he will address the matter. I also have a beef chairman seated on my right. We need a scheme for sheep and the money seems to be available.

Knowledge transfer programmes are very important, as is education. I personally believe that there are huge question marks about the type of education that some young farmers are being forced into enduring in order to qualify for a green certificate. In order to qualify for schemes, young farmers must undertake courses of varying levels. It seems that the mantra is "Produce more for less" but there is no future in producing more for less. We want to get more and then we will produce more. One also hears that by 2050 there will be 9 billion people in the world so farmers must get busy. We are going be dead by 2050. We will certainly will not be farming at that stage and if we are then we will be going about on two sticks. A few old crocks is all that will be left farming in Ireland at that time if TTIP is approved because young people will have emigrated to farm elsewhere. Recently I heard the phrase in a film to get busy living or get busy dying. We will certainly be busy dying as farmers if TTIP runs through without giving us proper food labelling and a proper price for our product. The Irish product is far superior to what is available in the United States of America where its people are even more obese than they are here. There are question marks regarding the education provided.

The next issue is knowledge transfer and mentoring by older farmers. I have spoken to a lot of older successful farmers who have been through the programme. There seems to be a lot of mentoring done in business as well. The farming sector should have more mentoring rather than scientists trying to sell junk science. There are a lot more false prophets than ever before and they are sponsored. The sponsorship of the likes of Teagasc by a meat company that tells farmers to get busy producing more. The company is going to set up a 125-acre farm in the west of Ireland which will have 100 suckler cows but only one man running the farm. All of the cattle for beef production will be fed using an intensive indoor meal system. I shudder when I think of the kind of product that such a farm will produce.

A similar dairy system exists in Kilkenny and it was shocking to see how many cattle died there when the region suffered extreme weather last year. The case was mentioned in the newspapers a few weeks ago. If animal welfare people saw what happens at that location, pressure would be put on farming in Ireland. We should not set up examples that show how inefficient farmers are. We must set up examples that show how good we are at producing high-quality food. We should not pressurise farmers further but pay them adequately to produce more if they can afford to do so. I shall not say too much more.

Senator Mary Ann O'Brien mentioned the TTIP labelling issue. We have dropped the ball on the GM issue. We have got pick it up, run with it and batten down the hatches in respect of it. I shall ask my two able chairmen to comment.

Andrew Doyle (Wicklow, Fine Gael)
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I must call Mr. Phelan and others. I am also conscious that a vote may be called shortly.

Mr. Edmond Phelan:

I shall be as brief as I can. Everything is down to control. We have a handful of beef barons who control the meat industry, a handful of retailers and, as Mr. Kent said, a handful of chemical companies control our inputs.

Feed lots control the marketplace. I have written about the issue for a long time and some people have claimed that I try to talk down prices. All I want is for farmers to hear a realistic view. People may feel they are paying too much but I do not know about that. I do know that the man who produces store cattle must get paid as well.

A big mistake was made a few years ago when the ban on below-cost selling was removed. Retailers do not sell stuff below cost out of altruistic tendencies that they may have but do so in order to entice people into their stores. If there was a ban on below-cost buying, retailers would have to pay the producer a living wage and could do what they wanted with the product afterwards. If retailers buy cheap, they force the producer to sell cheap.

In terms of prices, we all know how bad beef prices were last year. I predict that the situation will be worse next year because more cattle have been born in 2015 than in 2012. Those animals will come on the market at the end of 2016 and the beginning of 2017. I do not know how we will get around this problem unless we live exports are permitted to proceed. I am of the view that the Minister for Agriculture, Food and the Marine has paid lip service to the issue and that nobody really wants the cattle to be exported. People have claimed that the current situation will keep jobs in the country. That may be so and in a perfect world I would agree but when production in the factories climbs over 30,000 cattle a week then the price goes down which has always been the way. We have had Harvest 2020 and more recently 2025 where both programmes talked about ramping up production. There is no point in upping production when the price is going down. Last year 10% extra meat was produced in 2014 when compared with 2013. As a result, the price was reduced by more than 10% which meant farmers got less money for 10% extra production even though they had 10% extra cost. Therefore, farmers were much worse off and that is all I shall say.

Mr. John Brooks:

I am delighted to speak on the sheep issue and to represent the ICMSA. First, I wish to point out that there are 33,000 sheep farmers in Ireland and many of them farm land that is suitable for no other enterprise. On a positive note, we welcome the reintroduction of the sheep fencing grants and the fact that the conversion of existing buildings into slatted sheds is now allowable under TAMS. However, we question why refurbishment or retrofitting of existing farm buildings, under farm safety and animal welfare issues, were not included under TAMS.

In the context of what we have said here on the issue of the live export of sheep, live exporters have told us regularly that there are markets on the Continent for sheep, store lambs, feeding ewes, etc. The current system means that if somebody on the Continent or in the UK wishes to buy sheep in Ireland, the animals must be retained on the farm for at least 21 days and up to 30 days, depending on the reading of the rules by the Department of Agriculture, Food and the Marine. We believe that such a stipulation is crazy and that the same system for the export of suckler calves should apply to sheep.

One of the members asked from where would the sum of €25 million that we mentioned to fund the sheep scheme come. We believe that €25 million is a small percentage of the overall rural development fund and that there will be underspends in respect of some of the existing schemes. We also believe that improving Exchequer returns may mean additional funding can be provided for the scheme. It is vital that we have some sort of sheep scheme.

Sheep farming has been neglected. We fared very poorly under the reference years because of the system that was in place at the time. Now we are faring very poorly under the current rural development programme, as we have been left out. In comparison a sum of €52 million has been allocated to the suckler scheme. We are calling for a scheme with an allocation of at least €25 million for sheep farmers.

Andrew Doyle (Wicklow, Fine Gael)
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Members, I am sorry but I must allow the representatives from Macra na Feirme to contribute now in case the vote is called and we will have to go to the Chamber.

Mr. Seán Finan:

Senator Comiskey, Deputies Ferris and Deering spoke about the importance of education, which I will come back to shortly, but Senator Comiskey also referred to collaborative arrangements and the land mobility programme. The land mobility programme is delivering. We know there are more farmers over the age of 80 years than under the age of 35 years. This programme is addressing that issue and is encouraging more young blood into the industry by encouraging young farmers to become involved in different arrangements. The benefit is that the landowner retains ownership of his land while at the same time the young farmers get an opportunity to get into the industry and develop themselves within the industry. We also welcome the farm transfer partnerships proposal in the recent budget, which will have a major impact and will encourage more young blood into the industry.

The collaborative farming scheme which is part of the rural development programme is beneficial and has a very important role in the land mobility programme. Senator Comiskey also raised the question of access to finance, which is a significant issue and I call on the committee to help in ensuring the European Investment Bank funding, which the Commissioner speaks about, can be drawn down in Ireland. We are led to believe there is a mechanism for young farmers to draw down money at low interest rates and we would like the committee to focus on this issue which would help us as we will be working on it as well.

Macra na Feirme was founded in 1944 to give young farmers practical skills in agriculture. Thankfully the education system has evolved since then and the formal education system has developed. We are constantly in contact with Teagasc about coming up with ways of improving the current system for young farmers so that they can get the skills they require to develop their businesses.

I spoke earlier about a training needs analysis that we carried out earlier in the year. The analysis identified that young farmers wanted upskilling on the practical skills. Some three to five years after finishing their agriculture education, they realise they have a deficiency in particular skills and that is where our programme to try to deal with the practical skills comes in. The young farmers do not want to go into a classroom and sit down and take plenty of notes. They want to go on a course for a day and on the following morning implement the practices they have learned on their home farms. This is very important.

Teagasc is unique in that it combines research with its education and advisory service. That allows a knowledge transfer through the system, which is very important. We always encourage young farmers to upskill in agriculture. My colleague Mr. Bryan Hynes, a young dairy farmer will take us through the importance of focusing on the key drivers of profitability.

Deputy Deering also spoke about the price being paid for stores at present. I am a beef farmer and store cattle are dear. We encourage our young farmers to budget, which is critical, so as to ensure they know the cost of production. Young farmers need to be conscious of their budgets and what they can get out of their business.

I now hand over to Mr. Bryan Hynes, chairman of our agricultural affairs committee.

Andrew Doyle (Wicklow, Fine Gael)
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The vote has been called but we have approximately three minutes remaining.

Mr. Bryan Hynes:

As Mr. Finan said I moved home three years ago and started dairy farming. We had a beef farm. I am in the process of expanding and developing a dairy herd. Older farmers will tell you that expansion is expensive. As Deputy Deering mentioned we have to make the most of grass. I question whether the current grants are delivering that outcome. The TAMS scheme delivers grants for concrete slatted units. However, young farmers need to invest in the profit drivers that will make them money, such as roadways, grazing infrastructure, water tanks, reseeding, PK and lime requirements and land drainage, for which there are no grants. If we want to make money in the short term, that is what we need to do, then we will be able to afford sheds. We are at the stage, where when the young farmer gets the farm, everybody is asking him if he is building a shed. I am telling farmers not to build as the cost of doing so will cripple him or her. We need to invest in what will make money in the short term. We can and need to be innovative. When young farmers are starting out, they should get help to rent sheds. I worry about the impact of encouraging high investment in concrete from day one.

Andrew Doyle (Wicklow, Fine Gael)
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That is a fair point. On that salutary common sense note, I will draw the meeting to a close.

I thank the representative from ICSA and Macra na Feirme for coming before us. I thank them for bearing with the process as the session was longer than anticipated. We will take up many of the recommendations and incorporate them in the committee's work. This follows on from what we did earlier on the volatility report. A number of the same issues arise in terms of the market management tools, finance, the taxation code, State aid rules regarding the rainy day fund deposit scheme, similar to the Macra na Feirme bond. They all amount to the very same thing, a protection mechanism, without having to bring in another global insurance company to extract more money out of the system for the purpose of providing a very expensive insurance scheme, the point made by John Comer. These are the main points I have drawn from today's meeting, but there are plenty of others as well. We are cognisant of TTIP, because we discussed it during our extended private session.