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.